Corrective Action Plans

Explanation & Corrective Action:

The Division has added another member to the financial team, and will revise the review of the transactions between MSI, IDIS and the Financial Summary tio ensure all drawdowns are done timely and correct.

Implementation Date & Explanation:

The additional review of trqansactions has been imp0lemented as of this date.

Finding 2024-004 Lack of Internal Control over Cash Management Type of Finding: Material weakness in internal control over compliance and material noncompliance. Name of Contact: Adela Lane, Executive Director. Corrective Action Plan: 1. Strengthen the payment review process: • Action: Enforce and document a stricter segregation of duties in the payment process. This will ensure the individual requesting a payment is not the same person who authorizes the payment. • Details: All payment requests must be cross-referenced with a corresponding invoice or receipt and reviewed and approved by an authorized department head. This Department Head must not be the one who submitted the initial request. 2. Implement a two-tiered review for cash receipts: • Action: Establish a formal two-tiered cash receipts process to enhance accountability and accuracy. • Details: o Tier 1: The individual receiving and logging cash receipts will immediately perform a preliminary count and documentation. o Tier 2: A separate, authorized staff member will perform a second, independent review of the cash receipt records and verify the funds against the deposit slip before the funds are deposited. 3. Standardize training and onboarding for all staff: • Action: Develop a standardized training curriculum on financial management policies and procedures, including a dedicated section on cash management best practices. • Details: o All new permanent and staff members will undergo mandatory training on the updated policies. o Training will cover the importance of internal controls, specifically emphasizing segregation of duties in cash handling. o The Executive Director will meet with all new finance and administrative staff within their first two weeks to review proper protocols and emphasize the organization's commitment to financial controls. 4. Introduce periodic, surprise cash audits: • Action: Conduct unannounced cash counts and reconciliations to ensure compliance with procedures. • Details: An authorized, independent party will perform these surprise audits quarterly to check cash on hand and compare records against financial systems. 5. Enhance oversight and reporting: • Action: The Executive Director will provide regular updates on the implementation of these corrective actions to the Native Village of Point Hope Tribal Council. • Details: A formal report will be presented quarterly, outlining the progress of the corrective actions and any findings from the new oversight procedures. This provides a clear accountability mechanism. Proposed Completion Date: Ongoing, Starting Early 2026.

Condition: An effective internal control system was not in place to ensure compliance with requirements related to the grant agreement and the Cash Management compliance requirements. Management's Corrective Actions: During 2025, Hamilton County Area Neighborhood Development, Inc. (HAND) hired a controller to assist with the preparation of the parent company and subsidiaries financials while instituting improved internal control policies. As such, HAND with the assistance of its controller will establish effective internal control systems to ensure the compliance with the requirements for grant agreements and cash management compliance requirements

2024-002 - Lack of Independent Review and Approval Auditor Description of Condition and Effect: During our testing of Allowable Costs/Cost Principles, of the 12 items tested, we noted all 12 instances where time sheets were missing evidence of review and approval. In addition, there was no evidence of review and approval of the hourly rate or salary for all the employees tested. During Cash Management testing, of the three items tested, all three drawdown requests were missing evidence of review and approval. Finally, during our testing of Reporting, all four of the reports selected for testing lacked evidence of review and approval. The Organization did not comply with the federal requirements as noted per 2 CFR 200.303. Auditor Recommendation: We recommend the Organization adheres to their internal control process of an independent review and approval of transactions, cash management and reporting related to federal grant programs. Corrective Action: While the Organization has controls in place to ensure proper review and approval, Management will ensure to have this process documented going forward. Responsible Person: Dora Gonzales Anticipated Completion Date: December 2025

Federal Award Findings and Questioned Costs – Year ending December 31, 2024 Finding 2024-001 – Internal control deficiency and noncompliance over activities allowed or unallowed, allowable costs/cost principles, reporting, and special tests and provisions related to amounts reimbursed for the project worksheets. Identification of the federal program: Assistance Listing Number 97.036: • COVID-19 – Disaster Grants – Public Assistance (Presidentially Declared Disasters) • U.S. Department of Homeland Security • Federal award identification number: o Project number 699651 – CV-727 2020 Q2 PPE and Screening Thermometers • Federal award year – January 20, 2020 to May 11, 2023 • Pass-through entity – Arizona Department of Emergency and Military Affairs (Arizona DEMA) Condition: During the testing over the expenditures included in the project worksheets, management did not have effective internal controls in place to ensure expenditures reported for reimbursement in the FEMA project worksheets were actual paid expenditures. This resulted in an overstatement of the amount reimbursed by FEMA. Management performed an analysis of all expenditures submitted to FEMA and determined there were 4 expenditures reported for reimbursement in the FEMA project worksheets that were not based on actual paid expenditures resulting in an overstatement of the amount reimbursed by FEMA in the amount of $1,406,446. Cause: Management did not have effective internal controls in place over the compliance requirements as stated in the criteria or specific requirement section of the report. Effect or potential effect: Management was reimbursed by FEMA for expenditures that were not based on actual paid expenditures which resulted in an overstatement of the amount reimbursed by FEMA. Without sufficient internal controls, other compliance matters could occur in the future. Questioned costs: $1,406,446 – Assistance Listing Number 97.036 – Federal award identification number – Project number 699651 – CV-727 2020 Q2 PPE and Screening Thermometers Questioned costs were computed by calculating the difference between the expenditures submitted for reimbursement in the FEMA project worksheets and the actual paid expenditures. Context: During the testing over the expenditures included in the project worksheets, the auditors obtained a listing of expenditures submitted for reimbursement to FEMA and selected a sample of 67 for testing the compliance requirements. There was 1 out of 67 selections where the expenditure reported for reimbursement was not based on actual paid expenditure. The sampling was a statistically valid sample. Management performed an analysis of all expenditures submitted to FEMA and determined there were 4 expenditures reported for reimbursement in the FEMA project worksheets that were not based on actual paid expenditures resulting in an overstatement of the amount reimbursed by FEMA in the amount of $1,406,446. Management’s control regarding the review of the project worksheet expenditures did not identify this matter when submitting the project worksheet for reimbursement to FEMA. Identification as a repeat finding, if applicable: No. Recommendation: Management should develop and implement effective internal controls to ensure expenditures reported for reimbursement in the FEMA project worksheets are actual paid expenditures. Management should refund the questioned costs to FEMA and work with FEMA to determine the extent of additional courses of action. Views of responsible officials: Management concurs with the audit finding and has implemented a corrective action plan to address the identified issue. Management has notified Arizona DEMA of the identified expenditures and has begun the process of reimbursing the $1,406,446 to FEMA. For all future FEMA project applications, Management will conduct a comprehensive reconciliation process prior to submission. This process will include a detailed review of invoice documentation and verification of payment to ensure compliance with applicable federal requirements. Responsible Parties: Heather Mahoney, Network Controller Anticipated Date of Completion: September 30, 2025

2024-005 Community Economic Adjustment of Establishment, Expansion, Realignment, or Closure of a Military Installation/ Finance Delayed Requests for Reimbursement of Federal Funds Starting in Fiscal Year 2025-2026, LRA’s Finance Department has included within its monthly checklist accounting closing procedures the requirement of processing and requesting reimbursement of federal funds under the cost reimbursement method. Internal deadlines have been established to complete this process and be able to submit all reimbursement within 30 days after each monthly closing. This change in procedure will ensure reimbursement requests are submitted within 30 days once the department has finished its monthly accounting closing procedure. Jamille E Muriente Díaz, Financial Affair Director Telephone: 787-705-7188 Email: Jamille.muriente@lra.pr.gov Target Completion Date - 6/30/2026

2024-004 Water and Waste Disposal Loans and Grants (Section 306C) (Not A Major Program) Reserve Account The Finance Department will transferer the amount of $151,462 to fully fund the Reserve Account to meet the $201,982 balance required by the loan agreement. Starting in Fiscal Year 2025-2026, LRA’s Finance Department will implement within its monthly accounting closing procedures the reconciliation and review of all transfers from General Account to Reserve Account. The monthly reconciliations and review will provide full compliance with USDA reserve account requirements, eliminates repeated findings in future audits and will improve transparency in reporting strengthening accountability and reduced risk of federal payments. LRA Finance Department will establish a formal review process to ensure all prior year findings are properly tracked and resolved. Jamille E Muriente Díaz, Financial Affair Director Telephone: 787-705-7188 Email: Jamille.muriente@lra.pr.gov Target Completion Date - 6/30/2026

Management concurs with the recommendation and is committed to strengthening internal controls over the grant reporting process to similar overcharges in the future. To address the identified issues, FWCRC will implement the following corrective actions: - Draw Submission Reviews: We will establish a formal review protocol for all draw submissions to verify that expenses have not been previously reimbursed. This will include cross-referencing prior draws and maintaining detailed tracking logs. - Staff Training: Targeted training sessions will be provided to accounting and grants management personnel. These sessions will focus on federal cost principles, allowable costs, and proper drawdown procedures to ensure compliance and consistency. - Oversight and Reconciliation: Supervisory review procedures will be enhanced to include reconciliation of all funding sources prior to draw submission. This will help ensure accuracy and prevent duplication of reimbursements.

Planned Corrective Action: To enable an idependent review by Finance personnel and verify the indirect cost rate used, all supporting RMTS reports will be submitted to the Accounting Department along wiht reimbursement requests. Name of Responsible Party: Serge Davis, Controller Anticipated Completion Date: 12/31/2025.

Immediate Reimbursement: The Housing Authority will initiate the reimbursement of the Public Housing Program for the identified rental assistance funds. Policy and Procedure Updates: Internal cash management policies are being revised to establish clear timelines and responsibilities for fund reimbursements. Staff Training: All relevant personnel will receive training on HUD’s cash management requirements and the updated internal procedures to ensure consistent and timely compliance. Monthly Monitoring: A monthly reconciliation and review process will be implemented to monitor fund transfers and reimbursements. This will be overseen by the Finance Director and reported to the Executive Director quarterly. Fee Accountant Oversight: To strengthen financial oversight, the Housing Authority will engage a fee accountant to serve as an additional layer of review. This professional will provide independent verification of financial transactions and ensure compliance with HUD cash management standards.

Management’s Response: We concur. Management’s Response: We concur. View of Responsible Officials and Corrective Action: The CEO and Finance Team are responsible for implementing and maintaining the reimbursement process. A standardized procedure has been established to ensure reimbursement requests for the prior month’s work are completed and submitted by the end of the following month. This process is consistently utilized for grant-related activities and is regularly monitored and reviewed by leadership to ensure compliance. Anticipated Completion Date: TPREF has implemented this new process as of January 1, 2024, and reviewed/revised the process as of January 1, 2025.

2024-007 - Significant Deficiency in Internal Control and Non-material Noncompliance - Schedule of Expenditures of Federal Award Awareness and Preparation WPHW understands this finding and will be implementing further steps to ensure full compliance with this finding. The follow process has been put in place to ensure compliance: 1) Director of Accounting and Grants Director will ensure they have appropriate training and work collaboratively to develop documentation process a. The Grant Director will update all grants as they are received, to ensure an accurate list of grants b. The Director of Accounting will update all the financial data for each grant 2) The Director of Accounting will be responsible for the review and submitting document to the auditing firm For FY25, the Director of Accounting and Grant Director will jointly build the document and review to ensure completeness and accuracy. Person(s) Responsible: Beth McLean, Director of Accounting Timing for Implementation: FY25-FY26

Partnerships for Climate-Smart Commodities – Assistance Listing No. 10.937 Recommendation: We recommend the Organization implement a formal control where someone other than the preparer documents their review of the financial and performance reports prior to submitting to the federal agency. This review would include comparing the amounts in the report to the general ledger or other supporting documents. This review should be supported by documenting the signature and date prior to submission Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The Organization is finalizing the Federal Grant Report Review and Submission Protocol whose purpose is to ensure that all federal funding programmatic reports and FFRs are accurate, complete, and compliant with grant requirements and federal regulations before they are submitted to the funding agency. This form will be filed in the project folder.

Partnerships for Climate-Smart Commodities – Assistance Listing No. 10.937 Recommendation: We recommend the Organization implement a formal control where someone other than the preparer document their review of the claim prior to submitting to the federal agency. This review would include comparing the amounts in the report to the general ledger or other supporting documents. This review should be supported by documenting the signature and date prior to submission. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The Organization has created a process to ensure that claims are reviewed and approved prior to submission to the funder. This starts with the Claim/Billing Approval Form that is prepared by the Grants Manager/Designee and is routed to the Project Manager along with the supporting documentation. Once the form has been approved and electronically signed by both staff, it will be saved in the Organization’s internal files, and the claim will be initiated in the funder portal. Name(s) of the contact person(s) responsible for corrective action: Jill Matchett, Grants Manager Planned completion date for corrective action plan: October 10, 2025

Federal agency: U.S. Department of Health and Human Services Federal Award Project Title: Better Family Life’s Relationship, Education, Advancement, and Development for Youth for Life Project Assistance Listing Number: 93.086 Assistance Listing Program Title: Healthy Marriage Promotion and Responsible Fatherhood Grants Award Period: September 30, 2023 – September 29, 2024 Award Period: September 30, 2024 – September 29, 2025 Federal agency: U.S. Department of Health and Human Services Federal Award Project Title: Better Family Life’s Teen Pregnancy Prevention Education Assistance Listing Number: 93.297 Assistance Listing Program Title: Adolescent Health Programs Award Period: July 1, 2023 – June 30, 2024 Award Period: July 1, 2024 – June 30, 2025 Management response to 2024-002: In response to the auditors’ recommendation, management has addressed this deficiency by assigning appropriate personnel to review and approve all Federal reporting before submission. Additionally, management has implemented specific procedures for review and approval of drawdown requests, which include reviewing the indirect cost rate applied in all drawdown requests.

Federal agency: U.S. Department of Health and Human Services Federal Award Project Title: Better Family Life’s Relationship, Education, Advancement, and Development for Youth for Life Project Assistance Listing Number: 93.086 Assistance Listing Program Title: Healthy Marriage Promotion and Responsible Fatherhood Grants Award Period: September 30, 2023 – September 29, 2024 Award Period: September 30, 2024 – September 29, 2025 Federal agency: U.S. Department of Health and Human Services Federal Award Project Title: Better Family Life’s Teen Pregnancy Prevention Education Assistance Listing Number: 93.297 Assistance Listing Program Title: Adolescent Health Programs Award Period: July 1, 2023 – June 30, 2024 Award Period: July 1, 2024 – June 30, 2025 Management response to 2024-001: In response to the auditors’ recommendation, management has addressed this deficiency by assigning appropriate personnel to properly track and monitor drawdown requests to ensure the costs requested for reimbursement have been incurred, are complete and accurate, and in line with Federal award requirements. Additionally, management has implemented specific procedures for review and approval of all drawdown requests.

Finding No. 2024-001: Obligation Requirement for Capital Fund Program Drawdowns (Significant Deficiency Corrective Action Plan: NBHA has reviewed its internal controls regarding the obligation requirement for CFP LOCCS and will implement additional monitoring procedures to ensure timely obligation of funds. This includes developing a tracking spreadsheet and assigning a staff member to review obligations quarterly. The Executive Director will receive quarterly reports to ensure compliance going forward. Responsible Person: Reginal Barner, Executive Director Expected Completion Date: December 31, 2025

We agree that surplus cash deposit was not made in FY2020, and the recommendations described above. Management will deposit any surplus cash required into the residual receipts in future periods.

We agree that surplus cash deposit was not made in FY2019, and the recommendations described above. Management will deposit any surplus cash required into the residual receipts in future periods.

With the addition of personnel, the finance team has been restructured to allow for a more streamlined month-end process. As part of the month-end process we have implemented more collaborative and robust communication between the grants management and finance teams to ensure accuracy in our grant management process.

Finding # 2025-003 Type: Immaterial noncompliance U.S. Department of Commerce, National Oceanic and Atmospheric Administration Assistance Listing #11.441 Finding: In accordance with 2 CFR 200.305, organizations that receive more than $250,000 of federal funding per year should maintain those funds in an interest-bearing account. Interest earned in excess of $500 should be remitted back to the federal government. Presently, funds are not maintained in an interest-bearing account. Corrective Action: Funds on hand will be moved to an interest-bearing account. Anticipated Completion Date December 2025

Allowable Costs Services for Victims of Human Trafficking – Assistance Listing No. 16.320 Recommendation: We recommend the Organization design controls to ensure the draw down requests and related support are formally reviewed and approved by the Executive Director for allowability before submitting the request to the awarding agency. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action planned in response to finding: The Organization has implemented a formal review and approval process, as outlined in the board-approved Financial Management Policy & Procedure Manual, to ensure all draw down requests and supporting documentation are reviewed and approved by the Executive Director for allowability prior to submission to the awarding agency, with all approved support retained on file. This process is in practice as of the date of this letter, with corrective actions continuing as needed to ensure effectiveness. Name of the contact person responsible for corrective action: Megan Mattimoe, Executive Director Planned completion date for corrective action plan: December 31, 2025