Corrective Action Plans

CORRECTIVE ACTION PLAN Oversight Agency for Audit: U.S. Department of Education The City of Quincy, Massachusetts respectfully submits the following corrective action plan for the year ended June 30, 2024. Name and address of independent public accounting firm: CBIZ CPAs P.C. 53 State Street, 17ᵗʰ Floor Boston, MA 02109 Audit period: July 1, 2023 through June 30, 2024 The finding from the June 30, 2024, schedule of findings and questioned costs is discussed below. The finding is numbered consistently with the number assigned in the schedule. Financial Statement Finding Finding 2024-001: Certain Department Expenditures Exceeding Appropriated Amounts – General Fund – Significant Deficiency Condition: During 2024, it was noted that expenditures in the public safety and education functions exceeded the amounts appropriated by the City Council for the fiscal year. Criteria: Massachusetts general law prohibits the City from incurring liabilities in excess of appropriations in each department with certain specific exceptions, such as snow and ice removal costs, state and county charges, and debt service. Prudent budgetary control and monitoring are essential to ensure compliance with such requirements. Cause: The overspending of these appropriations occurred due to an inadequate internal control system to ensure timely budget amendments. Effect: Overspending appropriations in the General Fund constitutes noncompliance with state law and exposes the City to potential fiscal consequences, as the state may require the City to raise such deficits in the subsequent fiscal year. It may also indicate a weakness in the City's internal controls over budgetary compliance. Recommendation: We recommend that City management strengthen internal controls over budgetary compliance. Management should strengthen its’ procedures throughout the year to monitor budget-to-actual expenditures and ensure timely action, such as requesting formal budget amendments when actual expenditures approach or exceed authorized appropriations. Views of Responsible Officials: The Municipal Finance Office will be implementing procedures to ensure that the Municipal Finance Office and relevant department heads document reviews of budget to actual reports monthly throughout the year, with increased review intervals during June. The purpose of this increased monitoring is to ensure that potential budgetary appropriation deficits are identified in a timelier manner that will allow for any necessary budgetary amendments to be approved by the City Council. Finding 2024-002: Information Technology Controls in Financial Statements – Significant Deficiency Condition: During 2024, we noted the following deficiencies relating to information technology controls in the financial statement reporting process: • User Access Mirroring: When new users are provisioned in the accounting system, access rights are often “mirrored” from existing users without sufficient review of job responsibilities. This practice results in users receiving access to system functions beyond what is necessary for their roles and may compromise segregation of duties. • Privileged Access: A review of privileged user listings indicated access accounts with no exclusionary parameters. • Inadequate Controls Over System Upgrades: When implementing accounting system upgrades, controls over change management including testing, documentation, and approval, were not adequately designed or consistently applied. Instances were noted where upgrades were implemented without thorough pre-deployment testing and formal approval from finance or IT management. Criteria: Best practices and standards for internal control require: • Role-based access provisioning aligned with users’ responsibilities and effective segregation of duties. • The use of exclusionary parameters enhances the ability to monitor system access for unauthorized access. • Robust change management controls over system upgrades, including testing, documentation, and management approval, to ensure system integrity and minimize the risk of errors or unauthorized changes impacting financial reporting. Cause: These deficiencies appear to result from a lack of formalized policies and procedures for user access provisioning and for managing and documenting accounting system upgrades. Effect: The deficiencies increase the risk of: • Unauthorized access or inappropriate transactions due to excessive or incompatible user rights, undermining segregation of duties and accountability. • Errors, omissions, or unauthorized changes introduced during system upgrades, potentially affecting the integrity and accuracy of financial data and financial statement preparation. Recommendation: We recommend that City management: • Implement procedures to provision user access based on individual roles and responsibilities, with documented review and approval to ensure segregation of duties is maintained. This should be evidenced by written approval that is approved by Municipal Finance and Information Technology office. • Enhance the current process of implementing accounting system upgrades, including requirements for comprehensive pre-deployment testing, clear documentation, and explicit written approval from the Municipal Finance Office and the Information Technology office, prior to going “live” with the upgrade. • Periodically review system access and upgrade processes to ensure ongoing compliance with internal control standards. Views of Responsible Officials: The City will keep these recommendations in mind as it works to upgrade its already existing best practice IT control environment. Finding and Questioned Costs – Major Federal Program Audit Criteria or Specific Requirement: Uniform Guidance section 2 CFR § 200.430(g) requires non- Federal entities to maintain records that accurately reflect the work performed by employees whose salaries are charged, in whole or in part, to Federal awards. For employees working on a single Federal program, semi-annual certifications are required to document time and effort. Condition and Context: During testing of 40 payroll transactions for employees charged to the Special Education program, the City was unable to provide semi-annual certifications supporting that salaries and wages were properly allocated to the grant. Cause: The City did not have adequate procedures in place to ensure that required time and effort certifications were retained and readily available for payroll charged to Federal awards. Effect or Potential Effect: Failure to maintain required time and effort documentation resulted in the questioned costs documented below. Questioned costs are reported as follows: AL Number: 84.027 Name of Federal Program or Cluster: Special Education Cluster Questioned Costs: $2,572,675 Recommendation: We recommend the City establish and implement procedures to ensure that semiannual certifications are completed, maintained, and reviewed for all personnel whose salaries are charged to Federal awards. Views of Responsible Officials: This is a questioned cost due to the School Department not having completed certain administrative paperwork, required by grant regulations. We have implemented procedures during FY2025 to address this matter. The required paperwork will be retained on file going forward.

Finding 2024-004: Internal Control over Compliance Type of finding: Internal Control (material weakness) and Compliance (material noncompliance) Recommendation: The County should strengthen its internal controls over year-end financial close and reporting with adopted policies and procedures to ensure compliance with the Report submission portion of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements section. Action Taken: This finding is very similar to 2024-002. So, the action taken will be the same as noted for that finding and is as follows. The new accountants are not anticipating any issues with meeting the deadline of June 30, 2026 for the 2025 audit. As they have been busy implementing the new processes that are mentioned in the action taken plan for finding 2024-001. These new processes will ensure that they are able to meet any audit requirements for the 2025 audit in a timely manner. In addition, they are already making plans to start submitting reports, etc. to the auditor immediately beginning in the first quarter of 2026. Another thing that will help with the completion of the audit by deadline is that the accounting office and Treasurer's office have developed a good relationship and have a great line of communication, which helps in getting tasks completed on time. If there are questions regarding this plan, please call the party responsible listed below. Sincerely yours, Tressesa Martinez County Administrator Conejos County, Colorado

Walla Walla County is taking significant steps to address the recent audit finding regarding inadequate internal controls for compliance with federal requirements. Development of a New Policy To rectify this issue, the county is committed to formulating a new policy specifically tailored to meet federal standards. This development process is already in motion, with the expected completion date set for December 2025. Enhancing Internal Controls We believe that the new policy will significantly improve our internal controls and ensure full compliance with federal mandates. Training Initiatives Additionally, we will seek training opportunities to increase the knowledge of all staff regarding federal programs and compliance requirements, ensuring adherence to these programs and grants.

Grantee Response and Corrective Action Plan: AVLF concurs with the recommendation. The Organization will take the following corrective actions: 1. Remit corrected timesheets to the Agency for information purposes. 2. Revise the organization’s policy to include review and reconciliation of SER’s and timesheets prior to submission to the Agency. Responsible Parties: Jason Levister, Controller Date to be Completed: October 2025

● The Organization will develop a policy and procedures that require documentation of subrecipient monitoring for each subrecipient. ● The Organization will redesign the subrecipient contract template to include the federal award identification number and amount of federal funds awarded to each subrecipient. ● The Finance Director will distribute the policies and procedures along with the new contract template to all staff that manage grants. ● The Finance Director will train the staff on the new policies and procedures.

Corrective Action Plan Explanation of Disagreement with Audit Findings: There is no disagreement with the audit finding. Actions Planned in Response to Finding: In response to the finding, management will reinforce its expenditure approval policy by requiring all purchases and payments to have complete documentation and pre-approval from the appropriate level of management. Will perform quarterly internal audits to ensure ongoing compliance. Official Responsible for Ensuring CAP: Paul Walker, Chief Executive Officer Planned Completion Date for CAP: Immediately Plan to Monitor Completion of CAP: The CEO will convene quarterly meetings with the Finance and Compliance departments to review sampled federal transactions for proper documentation and approval. A compliance checklist will be completed and retained for monitoring.

Management disagrees with the following A) Management determined the expenditures charged to the 2021-#3 project MSOC Security Sustainment Costs, for camera, installation and project management were clearly related to the Investment justification which requested sustainment and upgrade to the existing MSOC the IJ states : “Investment provides maintenance and upgrades of software/hardware (I.e. servers/workstations), video surveillance management systems, operating systems, cameras systems, access control and communication systems for Plaquemines Port Harbor and Terminal District B) Management determined the questioned cost charged to the 2023-#3 project GIS for the cameras and the conference room were supported with the investment justification however management agrees the invoices for Survey totaling $95,900 should not have been changed to the grant. C) Management determined the expenditures charged to the 2023-#4 project Cybersecurity Network and IT: For Datto Backup, which is the name of the program, and cyber security training are valid expenses and align with the investment justification Management will ensure the following processes are added to the financial management policies and procedures over federal and state funds • The District will establish formal procedures requiring that all PSGP expenditures be cross-checked against the approved Investment Justification (IJ) and verified for compliance with the grant’s period of performance prior to payment. No disbursement of federal funds will occur unless documentation demonstrates that the expenditure directly aligns with the approved grant scope and timing. • This documentation will be required within the system in order to process payments to the vendor. • The District will consult with FEMA to assess the allowability of identified questioned costs. Management will follow FEMA’s guidance to resolve any discrepancies and ensure that all expenditures meet federal standards. • Mandatory training sessions are being scheduled for staff involved in grant administration and financial management. These sessions will cover Uniform Guidance requirements, documentation standards, and procedures for verifying expenditure eligibility under PSGP. These actions reflect the District’s commitment to regulatory compliance, fiscal responsibility, and continuous improvement in federal grant management practices.

The Organization will revisit the internal control process around invoice submissions and reimbursement request review. The Organization has since hired an outsourced accountant to assist with record keeping and assisting with ensuring compliance with Uniform Guidance. The Organization strives to remain compliant with Uniform Guidance in all respects to present both accurate and transparent records. If the Missouri Department of Social Services or the U.S. Department of the Treasury have questions regarding this plan, please call Jennifer Gadsky, MSW, LCSW, Executive Director, at (314)-938-4414.

Cause: Costs charged on the vendor invoice were not separated between allowable activity, broadband infrastructure development, and unallowable activity, electrical infrastructure development. Corrective Action Plan: “The corrective action has already been taken prior to audit completion. The costs related to unallowable activities have been reimbursed to the grant in the form of an offset against May 2025 draw to correct the error. All project expenditures incurred to date were reviewed to confirm there were no additional unallowable charges. Training was provided to contractors and subcontractors involved with the project to ensure a thorough understanding of the importance of maintaining separate accounting records for grant and non-grant projects. Furthermore, all personnel involved in grant administration, including project managers and finance staff, are required to attend training on federal grant compliance. Going forward, project and support teams will perform a more comprehensive review of project invoices and billing details as well as monitor project’s spend variances more closely to ensure grant compliance.”

The joint baord will adopt policy DAF

The audit finding was reviewed with the new assistant superintendent that oversees grants to ensure certifications are completed going forward. The SAU senior leadership team reorganized and moved the grant management responsibiltiies to a member of the senior leadership team.

Management has reviewed the finding above and concurs. A corrective action plan addressing the deficiencies will be completed and submitted within 60 days of the report.

Management has reviewed the finding above and concurs. A corrective action plan addressing the deficiencies will be completed and submitted within 60 days of the report.

The Finance Department Managemetn will implement policies to ensure timely financial reporting and esnure the timely completion of an audit. The city expects to have these issues addressed by June 30, 2026. The responsible party is Patrick Williams, Chief Accountant

CORRECTIVE ACTION PLANS Oversight Agency for Audit: U.S. Department of the Treasury The City of Haverhill, Massachusetts respectfully submits the following corrective action plans for the year ended June 30, 2024. Name and address of the independent public accounting firm: CBIZ CPAs P.C. 9 Executive Park Drive, Suite 100 Merrimack, NH 03054 Audit Period: July 1, 2023, through June 30, 2024 The findings from the June 30, 2024, schedule of findings and responses are discussed below. The findings are numbered consistently with the number assigned in the schedule. Finding 2024-005: Improve Controls and Documentation Over Allowability of Costs Federal Agency: U.S. Department of Education Award Name(s): Twenty-First Century Community Learning Centers Assistance Listing Number(s): 84.287, 84.287C Award Year: 2023, 2024 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Compliance Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement: Grantees must provide reasonable assurance that federal awards are expended only for allowable activities and that the costs of goods and services charged to federal awards are allowable and in accordance with the applicable cost principles. Management of the City is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. The Code of Federal Regulations Section 200.403(g) states that for costs to be allowable under Federal awards, they must be adequately documented and there must be sufficient documentation. Condition and Context: A sample of payroll expenditures were tested in order to determine if costs were allowable and adequately approved. As a result of our testing, it was determined that one payroll transaction had no timesheet approval, and one payroll transaction was self-approved. Payroll expenditures charged to the programs are required to be supported with documentation substantiating that the employees are eligible to be charged to the grant and that the payroll charged relates to time spent accomplishing grant objectives. This supporting documentation should be standardized and should include all required elements in accordance with applicable cost principles. Cause: The City did not have adequate controls in place to provide sufficient documentation to demonstrate compliance with federal and state time and effort reporting requirements. Effect or Potential Effect: Due to the weakness in internal controls and compliance noted above, there is a risk that amounts charged to federal awards may not be allowable or in accordance with applicable cost principles. Questioned Costs: Due to the condition noted above, we were unable to determine if the costs charged to the applicable grants are allowable. AL Number(s) Name of Federal Program or Cluster Questioned Costs 84.287, 84.287C Twenty-First Century Community Learning Centers $5,450 Recommendation: Management should enhance procedures and controls in place over the time and effort reporting and documentation requirements that department heads must adhere with to ensure compliance with federal and state time and effort reporting requirements. Views of Responsible Official: The School Department recognizes the weaknesses identified in grants management, as well as in the approval and allocation of allowable costs. To address these issues, the School Department has recently hired a new Business Manager/Chief Financial Officer (CFO). This individual is responsible for implementing appropriate internal controls that align with Best Practices, particularly in key areas such as invoice approval, payroll approval, grants management, and procurement compliance. To ensure ongoing improvement, training will be provided continuously for all staff members responsible for managing federal grants. This training will include; • Procedures to reconcile internal records with federal and state reports. • Maintain a process to ensure that costs charged to grants are allowable, necessary and reasonable, and properly allocated, and that these determinations are made in a consistent manner. • Determine whether indirect costs will be allocated to grant programs, and if so, maintain an appropriate process to make the allocation. • Maintain a process to track information about local matching funds, including identification of the source of such funds. • Identify and segregate costs as necessary for the grant (e.g., separate allowable and unallowable costs, separate direct costs from indirect costs, and separate administrative costs. • Account for and track grant-funded capital items. • Document grant procedures. • Maintain a comprehensive list of reporting requirements and a reminder system for meeting the reporting deadlines. • Identify who is responsible for the various reporting requirements. • Establish methodologies for the preparation of specialized reports. • Establish processes for obtaining all of the information needed for the Schedule of Expenditures of Federal Awards (SEFA). • Develop and document an understanding of audit requirements specific to grants, including those in Generally Accepted Government Auditing Standards (GAGAS), Generally Accepted Auditing Standards (GAAS), and Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). • Develop and document an understanding of audit requirements for grant close-outs. • Report if any process or internal control issues identified were resolved.

CORRECTIVE ACTION PLANS Oversight Agency for Audit: U.S. Department of the Treasury The City of Haverhill, Massachusetts respectfully submits the following corrective action plans for the year ended June 30, 2024. Name and address of the independent public accounting firm: CBIZ CPAs P.C. 9 Executive Park Drive, Suite 100 Merrimack, NH 03054 Audit Period: July 1, 2023, through June 30, 2024 The findings from the June 30, 2024, schedule of findings and responses are discussed below. The findings are numbered consistently with the number assigned in the schedule. Finding 2024-004: Improve Controls and Documentation Over Allowability of Costs Federal Program Information Federal Agency: U.S. Department of Education Award Name(s): Title I Grants to Local Educational Agencies Assistance Listing Number(s): 84.010 Award Year: 2023, 2024 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Award Name(s): COVID-19 – Education Stabilization Fund Assistance Listing Number(s): 84.425 Award Year: 2022 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Award Name(s): Twenty-First Century Community Learning Centers Assistance Listing Number(s): 84.287, 84.287C Award Year: 2023, 2024 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Award Name(s): Special Education Cluster Assistance Listing Number(s): 84.027, 84.173 Award Year: 2023 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Compliance Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement: Grantees must provide reasonable assurance that federal awards are expended only for allowable activities and that the costs of goods and services charged to federal awards are allowable and in accordance with the applicable cost principles. Management of the City is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. The Code of Federal Regulations Section 200.403(g) states that for costs to be allowable under Federal awards, they must be adequately documented and there must be sufficient documentation. Condition and Context: A sample of invoices were tested in order to determine if costs were allowable and adequately approved. As a result of our testing, it was determined that invoices were not approved for two transactions in the Title I Grants to Local Educational Agencies program and three invoices in the COVID-19 Education Stabilization Fund program. In addition, invoices were not able to be provided for three invoices in the COVID-19 Education Stabilization Fund program, one invoice in the Twenty-First Century Community Learning Centers program, and one invoice in the Special Education Cluster. Cause: The City did not have adequate controls in place to ensure invoices were properly approved and retained. Effect or Potential Effect: Due to the weakness in internal controls and compliance noted above, there is a risk that amounts charged to federal awards may not be allowable or in accordance with applicable cost principles. Questioned Costs: Due to the condition noted above, we were unable to determine if the costs charged to the applicable grants are allowable. AL Number(s) Name of Federal Program or Cluster Questioned Costs 84.010 Title I Grants to Local Educational Agencies $82,488 84.425 COVID-19 Education Stabilization Fund $136,876 84.287, 84.287C Twenty-First Century Community Learning Centers $1,305 84.027/84.173 Special Education Cluster $1,945 Recommendation: The City should enhance internal controls over the invoice approval and retention process in order to provide reasonable assurance that federal award transactions are allowable and in accordance with the applicable cost principles. Views of Responsible Official: The School Department recognizes the weaknesses identified in grants management, as well as in the approval and allocation of allowable costs. To address these issues, the School Department has recently hired a new Business Manager/Chief Financial Officer (CFO). This individual is responsible for implementing appropriate internal controls that align with Best Practices, particularly in key areas such as invoice approval, payroll approval, grants management, and procurement compliance. To ensure ongoing improvement, training will be provided continuously for all staff members responsible for managing federal grants. This training will include; • Procedures to reconcile internal records with federal and state reports. • Maintain a process to ensure that costs charged to grants are allowable, necessary and reasonable, and properly allocated, and that these determinations are made in a consistent manner. • Determine whether indirect costs will be allocated to grant programs, and if so, maintain an appropriate process to make the allocation. • Maintain a process to track information about local matching funds, including identification of the source of such funds. • Identify and segregate costs as necessary for the grant (e.g., separate allowable and unallowable costs, separate direct costs from indirect costs, and separate administrative costs. • Account for and track grant-funded capital items. • Document grant procedures. • Maintain a comprehensive list of reporting requirements and a reminder system for meeting the reporting deadlines. • Identify who is responsible for the various reporting requirements. • Establish methodologies for the preparation of specialized reports. • Establish processes for obtaining all of the information needed for the Schedule of Expenditures of Federal Awards (SEFA). • Develop and document an understanding of audit requirements specific to grants, including those in Generally Accepted Government Auditing Standards (GAGAS), Generally Accepted Auditing Standards (GAAS), and Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). • Develop and document an understanding of audit requirements for grant close-outs. • Report if any process or internal control issues identified were resolved.

Management agrees and will develop review procedures to respond to the findings.

Management agrees with the finding and will work with the City of San Antonio to correct the issue, and develop review procedures to respond to the finding.

Management agrees and will develop review procedures to respond to the findings.

Finding 2024-03 Insufficient Documentation Supporting Payroll Activity Condition: During testing of payroll claims, we noted that the Organization did not consistently maintain documentation of approved pay rates. Some employees had offer letters on file, while others did not. In certain cases, the offer letters on file contained pay rates that did not match the actual pay rates being paid. Although our procedures and inquiries confirmed that employees were paid the correct amounts in accordance with approved procedures, the approved documentation was not consistently retained. In addition, we noted that the Organization did not maintain properly completed and approved I-9 forms for all employees during the year. Corrective Actions Taken or Planned: The organization recognizes the importance of maintaining complete and accurate payroll documentation and acknowledges the deficiencies identified during the audit. While payroll payments were made accurately, we recognize that inconsistent retention of supporting documentation created a compliance risk. Certain documentation had been maintained in digital form by a former staff member. Due to staff turnover, these records were not readily accessible or able to be located during the audit period. Management has since initiated a process to update all employee files with current, complete, and properly executed documentation to ensure compliance and improve recordkeeping practices. Management and leadership remain committed to strengthening personnel file management, maintaining all required documentation in accordance with applicable regulations, and reinforcing oversight to prevent recurrence in future audit periods. The Organization plans to execute the following: 1. Standardization of Employee Files - The Organization has implemented a standardized checklist for all employee personnel files to ensure the presence of: + Signed offer letters with approved pay rates + Completed and verified I-9 forms + Any subsequent pay rate change approvals - Co-Executive Directors will be required to complete and sign the checklist for each employee file upon hire, and again during annual compliance reviews. 2. Offer Letter and Pay Rate Documentation - Effective immediately, all employees (existing and new) will have a signed offer letter or addendum on file reflecting their current pay rate. - For employees where discrepancies exist between historical offer letters and current pay, updated pay rate addendums will be drafted, signed by both employee and management, and placed in their personnel files. 3. I-9 Form Compliance - The organization will perform a full review of all current employee I-9 documentation to identify and correct any missing or incomplete forms. - Going forward, I-9 forms will be completed and verified on or before the employee’s first day of work, in accordance with federal requirements. - An annual HR compliance audit will be conducted to ensure all I-9’s are up to date and retained properly. 4. Training & Accountability - Administrative staff will receive refresher training on employment documentation requirements, including I-9 compliance and payroll authorization documentation. - The Co-Executive Directors will review a sample of personnel files quarterly to verify compliance and hold Co-Executive Directors accountable for maintaining accurate documentation. To ensure continued compliance, the Organization will maintain a centralized file tracking system, updated quarterly, and report results to the Board. Corrective actions will be taken immediately if gaps are identified.

Finding 2024-02 Failure to Follow Procurement Policy Condition: The Organization maintains a procurement policy that establishes spending thresholds and outlines the requirements for obtaining rate quotations at each of these levels. During audit procedures, it was noted that the Organization did not follow the policy’s requirements for obtaining and documenting rate quotations for two of the transactions reviewed. The Organization explained that the vendor was considered a unique partner, and competition was intentionally limited based on the specialized nature of the services provided. However, no documentation was retained to justify this decision to limit competition, as required by federal procurement standards. The absence of such documentation resulted in questioned costs for these transactions. Corrective Actions Taken or Planned: Prior to the award of ARPA grant funding in 2023, The Organization did not have a formal procurement policy in place. Implementation of such a policy was required to receive the award. At the time of implementation, however, partnerships had already been established and were identified in the original grant proposal. With respect to legal services, the Organization engaged the two primary organizations in Indianapolis that provide expungement assistance. Indiana Legal Services (“ILS”) was the first entity contacted, but after multiple attempts, no response was received from the designated point of contact. Subsequently, the Organization engaged another nonprofit organization, which responded promptly and agreed to serve as a partner under the grant. For grant compliance services, the Organization engaged a third party. This decision was based on recommendations from community partners, as well as her demonstrated work quality, professional reliability, and commitment to serving the target population. The Organization plans to execute the following: 1. Immediate Remediation - For the two transactions in question, the Organization will prepare and retain retroactive documentation outlining the rationale for limiting competition, citing the vendor’s unique qualifications and specialized services. This documentation will be added to the procurement files to ensure transparency and compliance. 2. Procurement Policy Enforcement - The Organization will reinforce its procurement policy with staff responsible for purchasing, emphasizing the following requirements: - Obtain and document at least three rate quotations when required. - When limiting competition, prepare a written justification memo explaining the rationale (e.g., sole source, specialized expertise, emergency procurement). - Retain all procurement documentation in a centralized file accessible for future audits. 3. Documentation Standardization - A Procurement Justification Form will be developed for instances where competition is intentionally limited. This form will include: + Vendor name and description of services + Reason competition is limited (sole source, unique expertise, etc.) + Approval signatures from both the requesting program lead and the Co-Executive Director - This form will be required for all procurements exceeding the competitive threshold where quotations are not obtained. 4. Staff Training - The Organization will provide refresher training to all staff involved in procurement to ensure they fully understand documentation requirements under both organizational policy and federal standards. - Training will specifically address scenarios involving sole source or unique vendor selections. 5. Oversight & Monitoring - All procurements exceeding $5,000 will require review and approval by the Board. - Quarterly internal audits will be performed by the Finance Manager to ensure procurement files include proper quotations or justification forms. The Board will receive quarterly procurement compliance reports from the Finance Manager. Any deviations will be documented and addressed immediately. Progress will be tracked as part of the Organization’s annual internal control review.

Management’s Response/Corrective Action Plan (Unaudited): The City acknowledges the finding and is committed to strengthening internal controls over compliance for the review and approval of grant-related expenditures. Effective immediately, the City implemented the following corrective measures: 1. Formalized Invoice Review and Approval Process o All grant-related invoices to undergo documented review and approval before the preparation and disbursement of funds. o The procedure will require reviewers to sign and date each invoice (either physically or electronically) to provide a verifiable audit trail. 2. Assignment of Review Responsibility o Designate a primary reviewer and a backup reviewer within the Finance Department to ensure continuity of compliance in the event of staffing turnover. o Review responsibility will be incorporated into the official job descriptions of these positions. 3. Training and Staff Development o Conduct mandatory training for all finance and grant administration personnel on the disbursement review process, compliance requirements under 2 CFR 200.303, and documentation retention protocols. o Training will be provided within 30 days of hire for all new staff assigned to the process. 4. Periodic Monitoring and Quality Checks o Implement quarterly internal reviews by the Finance Director (or designee) to verify adherence to the review and approval process. o Findings from these internal reviews will be documented and corrective steps taken promptly if deficiencies are noted. Planned Completion Date: Implementation and training of this plan is complete. Contact Person Responsible for Correction Action: Finance Director

Recommendation: We recommend the Organization establish policies and procedures to ensure adequate internal controls over the drawdown process of federal awards. Prior to submission of drawdown, supporting schedules and reports are reviewed by the Executive Director or appropriate management personnel. Plan: All federal draw down requests will be preceded by a revenues and expenses report provided to the Executive Director and the program manager for their review prior to draw down of the funds through any related portals. Person Responsible: Program Manager and Executive Director Plan Implementation: 9/30/2025 Status: Implemented

The Organization will implement the following corrective actions for the fiscal year ending June 30, 2024 to remediate the finding and address the cause of the finding. The Organization has hired staff with higher technical accounting skills than the previous staff. The following staff have been hired full-time or will be hired soon: Payroll and Benefits Specialist, Grant Accountant, Senior Staff Accountant, Accounts Payables and Receivables Specialist, and a Purchasing Specialist. • The Organization’s Human Resources has implemented quarterly audits on all new staff to verify each new staff member hired within the last year has a signed employee offer and appropriate backup support to support each employee’s annual salary. • The Organization has implemented a new accounting system – Sage Intacct. Additionally, we have implemented a grants project tracking module to better help with grants and contracts reporting and compliance. • The Organization has implemented a new payroll and human resources IT solution – UKG. All manual and onboarding processes have been implemented within the system for tracking and auditing purposes. • The Organization will implement an established month-end checklist for all monthly entries to be completed by assigned finance staff. We will ensure that all staff are trained adequately to handle any assigned task. All monthly entries are required to be reviewed and approved by the Chief Financial Officer prior to posting to the general ledger within our new Accounting Software. All appropriate backup documentation will be saved and stored within the accounting software. • All grant related year-end audit procedures has been transitioned to the Grant Accountant who has experience with audits, compliance, and reporting for City, State, and Federal grants. • The Organization has documented accounting policies and procedures to reflect the new month-end processes and provide training to staff on current and future policies. • The Organization will ensure that Finance personnel receive a minimum of twenty-five (25) hours of training annually of relevant accounting topics including updates to generally accepted accounting principles, generally accepted government accounting principles, nonprofit and governmental financial reporting, and other related accounting trainings. • The Organization will ensure that any personnel involved in financial reporting have the technical expertise to help with the preparation, review, and analysis of the financial statements and supplementary information. The target date for implementation is April 2025. The responsible party for the planned resources will be Raheel Shahzad, Chief Financial Officer (708) 288-7897. Our address is 340 E. 51st St., Chicago, IL 60615.

The City agrees with this finding. Having recognized this deficiency prior to commencement of this audit, the City implemented additional internal review requirements during FY25.