Corrective Action Plans

2022-003 Cash Management Material Noncompliance Cash Management Material Weakness in Internal Control over Compliance U.S. Department of Health and Human Services Passed-through the Arizona Department of Economic Security Refugee and Entrant Assistance State Administered Federal Financial Assistance Listing/CFDA #93.566; ADES18-191650; October 1, 2020 to September 30, 2021 and October 1, 2021 to September 30, 2022 Condition: Eide Bailly LLP (EB) noted that four out of four draw requests did not have adequate support for the class hours included. Management?s Response and Corrective Action Plan: ? Monthly Attendance Report are completed by data specialist using individual teachers? daily rosters. ? The Monthly Attendance Reports are verified by the program manager and corrected if any mistakes are identified. ? Monthly invoices are reviewed, prior to submission, with the Department Manager for additional verification and approval. ? After the student attendance has been reviewed by Program Manager and verified by the Department Manager, a review log is signed off by both the Program Manager and the Department Manager. ? Any changes to either the attendance logs or monthly student attendance will only be made with the authorization of the department manager after data has been verified, with an explanation of why that was needed. ? After the appropriate verifications have taken place, the Program Manager creates the monthly invoice, they will maintain and verify documentation for the student attendance hours reflected on the invoice. ? Management will continue to discuss and explore ways to strengthen our current internal controls, including, purchasing tracking software and/or the creation of a google form/document. ? Management will routinely review and consider any needed modifications to or implementation of new policies and procedures that would strengthen internal controls surrounding the invoicing process, record-keeping, and the management thereof. Contact Person: Jose J. Vaquera, VP of Client Services Anticipated Completion Date: May 15, 2023

The District will develop and implement appropriate controls to ensure accurate and timely reporting of meals served. Management will review the controls put in place on a bi-monthly basis and make any necessary changes if determined necessary. This finding will be resolved as of the date of this report.

Comments on the Finding and Each Recommendation: The required deposit of $15,276, per the July 31, 2021 Computation of Surplus Cash, Distributions and Residual Receipts, was not deposited into the residual receipts fund within 90 days of fiscal year end. The Regulatory Agreement requires Surplus Cash, as defined by HUD, to be deposited into a separate residual receipts fund within 90 days of the fiscal year end. The Corporation was not in compliance with the Regulatory Agreement. Management should monitor the Surplus Cash position and make required deposits to the residual receipts fund within 90 days of fiscal year end. Action(s) Taken and Planned on the Finding: Management deposited the $15,276 to the residual receipts fund on May 31, 2022. No further action is required.

2022-005 Allegations of Fraud Contact: Marusya Lazo Title: Vice President Finance Phone Number: 202 235 1880 Estimated Completion Date ? ongoing Corrective Action PSI continuously manages fraud risk through combination of preventative, detective and monitoring controls, and reinforces PSI?s expectations regarding ethical behavior through training and communications. PSI will continue to proactively report and investigate allegations of fraud and to raise awareness of the actions to be taken when there is s suspicion of fraud. PSI Global Internal Audit and Investigations team will continue to share lessons learned from the work performed and. Given the challenging operating environments in which PSI implements its programs, there is an ongoing risk of fraud, which PSI will continue to monitor, investigate, and mitigate.

2022-004 ? Education Stabilization Fund ? Prevailing wage rate requirements Criteria: Wage rate requirements apply to the Education Stabilization Fund when laborers and mechanics employed by contractors or subcontractors work on construction contracts more than $2,000. Laborers must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL). Nonfederal entities shall include in their contracts, subject to wage rate requirements, a provision that the contractor or subcontractor comply with those requirements and the DOL regulations. This includes a requirement for the contractor or subcontractor to submit to the District weekly payrolls and a statement of compliance (certified payrolls). Condition: There was one Education Stabilization Fund construction project performed by a subcontractor. Grant expenditures for the project paid by the Education Stabilization Fund totaled $263,826. There was not a prevailing wage clause in the contract and certified payrolls were not received. Cause: The District was not aware that wage rate requirements applied to the construction project until after it was completed. The District did verify that prevailing wage rates were paid by the contractor during the project; however, they did not obtain certified payrolls. Effect: A reimbursement request was made for expenditures that did not comply with wage rate requirements. Questioned Costs: $263,826 Auditor?s Recommendation: Establish controls to comply with wage rate requirements related to the Education Stabilization Fund. Grantee Response: The District will comply with the wage rate requirements for the Education Stabilization Fund going forward. Contact Person: Brian Zaleski Anticipated Completion: June 30, 2023

Name of Contact Person: Samuel A. Jones, President, Amurcon Realty Co., Managing Agent Corrective Action: Residual receipts were not remitted to the residual receipts account in a timely manner. Residual receipts are required to be remitted within 60 days of year-end. In order to avoid this issue in the future, surplus cash will be calculated prior to the audit. Proposed Completion Date: This plan was implemented on September 30, 2022, and will be used for all audits going forward.

Name of Contact Person: Samuel A. Jones, President, Amurcon Realty Co., Managing Agent Corrective Action: Residual receipts were not remitted to the residual receipts account in a timely manner. Residual receipts are required to be remitted within 60 days of year-end. In order to avoid this issue in the future, surplus cash will be calculated prior to the audit. Proposed Completion Date: This plan was implemented on September 30, 2022, and will be used for all audits going forward.

Federal Grants Management/Financial Management System Recommendation: The District will assess its financial management systems and related internal controls. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action planned/taken in response to finding: District personnel will assess existing policies and procedures and determine where new policies should be created or amended and communicate these policies to Administration and employees. Names of the contract person(s) responsible for corrective action: Karl Morrin, District Administrator; Jen Steber, Finance Manager Planned completion date for corrective action plan: June 30, 2023

The district will implement a system of internal controls over grant expenditure reporting and allocate adequate resources to ensure that all eligible grant expenditures are appropriately submitted for reimbursement in a timely manner. Anticipated Completion Date: As necessary Contact: Shannon Anderson, Superintendent, Momence CUSD1

Management agrees with the finding. The Organization is implementing a new Payroll and Human Resources system. This single system will house the data for both time allocations and payroll data, giving the Organization the ability to run reports with accurate hours and compensation allocated to specific grants for any period. This system will report in real time and account for salary increases as well.

Management agrees with the finding. The Organization has implemented a new reporting and approval process for submissions through the Payment Management System: ? A Detailed Statement of Activity is generated by the Director of Finance as soon as it is determined all revenues and expenditures have been recorded for the month. ? Report is reviewed and approved by Co-Executive Director. ? Director of Finance submits the reports in PMS and requests reimbursement. The Organization has hired a new Director of Finance with extensive experience in non-profit accounting.

Finding: 2022-003? Cash Management (repeat) Auditor Description of Condition and Effect: During our audit procedures over the District?s cash management process, we noted that one of the claim requests selected for testing did not agree to the District?s actual meal counts. As a result of this condition, the District does not have proper controls in place over its procedures for submission of claim requests. Auditor Recommendation: The District should establish procedures to ensure that the number of meals being submitted for reimbursement agrees to the actual meal counts. Corrective Action: The District implemented review and approval changes in March 2022 to correct this prior year finding. The process that the District uses currently allows for the correction of errors on meal claims before submission. Responsible Person: Shelbi Frayer, Contracted Finance Director Anticipated Completion Date: June 30, 2022

calculation. Recommendation: The Facility should recompute surplus cash ensuring CARES Act program cash is captured in the calculation and deposit the surplus cash into their residual receipts account. Action Taken: The Facility will update its computation and the owner-certified 2022 Annual Financial Statement submission. Surplus cash will be deposited into the project?s residual receipts account as soon as practicable.

Finding #2022-001: Comments on the Finding and Each Recommendation: The required deposit of $16,084, per the June 30, 2021 Computation of Surplus Cash, Distributions and Residual Receipts, was not deposited into the Residual Receipts Fund within 90 days of the fiscal year end. The Regulatory Agreement requires Surplus Cash, as defined by HUD, to be deposited into a separate Residual Receipts Fund within 90 days of the fiscal year end. The Corporation was not in compliance with the Regulatory Agreement. Management should monitor the Surplus Cash position and make required deposits to the Residual Receipts Fund within 90 days of fiscal year end. Action(s) Taken or Planned on the Finding: Management deposited the $16,084 to the Residual Receipts Fund on March 31, 2022. The finding is considered cleared.

Planned Corrective Action: Current policy and procedure in place will be followed and reviewed quarterly by grant accountant and food compliance officer.

Finding 2022-005: Cash Management and Reporting (Significant Deficiency) Information on the Federal Program: U.S. Department of State ALN 19.040 Criteria or Specific Requirement: 2 CFR Section 200.303 requires auditees to establish and maintain effective internal control over federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: FCE did not maintain documentary evidence of the review and approval of either its requests for cash drawdowns or its performance reports in accordance with the internal control requirements. Cause: FCE's management team works collaboratively to prepare the requests for cash draw downs and prepare the performance reports prior to submission. Per discussion with management, the review and approval is performed verbally during this process. As a result, FCE was not able to provide adequate support to document the review and approval of either its requests for cash drawdowns or its performance reports. Effect or Potential Effect: FCE was not able to provide evidence of the implementation of internal controls related to review and approval for cash draw downs and performance reports. Therefore, these submissions may have been inaccurately prepared. Recommendation: FCE should retain documentary evidence of its review and approval process, which should occur prior to submission of the requests for cash draw downs and performance reports. Action Taken: FCE acknowledges the importance of documentation to support review and approval of cash drawdowns and performance reports. FCE will develop and implement formal accounting policies and procedures to ensure that it completes and maintains the proper documentation with respect to requests for an advance or reimbursement (Form SF-270) and filing a progress report (SF-PPR).

Deposits in Excess of FDIC & Pledged Securities Coverage. Corrective action planned: - Cicero Housing will maintain deposits with the bank (BMO Harris) - The Bank (BMO Harris) will provide security as required by applicable law, regulation or rule per the third-party custodian agreement. The custodian (The Bank) agrees to provide safekeeping services and to hold any securities pledged by them in a custodial account established for the benefit of the secured party pursuant to the agreement signed. - The Director (Lillian Gutierrez) will maintain quarterly contact with our bank representative to verify fund balances are fully secure. Contact person: Lillian Gutierrez, Executive Director. Anticipated completion date: August 2, 2023.

The Trust for Tomorrow continues to add compensating controls each year when possible. Further, we will continue to review our processes to determine where duties can be segregated amongst existing staff. Additionally, the board will continue to provide close oversight of the Organization and evaluate that oversight on a consistent basis.

Material Weaknesses identified was from 2022-01 - Housing Quality Standards Inspections During audit procedures, it was identified that the Unit's Inspections were completed but if there was a failure, re-inspections were not completed as required within the 30-day period. The cause was identified that we did not have the necessary internal controls over compliance in place. That we are not re-inspecting units timely. The failure rate of 40 units examined during audit resulted in 14 failures for re-inspection. The recommendation was that we implement internal control processes and procedures to ensure that re-inspections are completed on a timely basis. Management Response: We became aware of a concern and performance issues with our HCV manager in the summer of 2021. She provided her notice of intent to resign effective December 31, 2021. We began a search for a manager in the fall of 2021 through many processes, including posting the position, inquiring of other housing authorities of our open position and networking. Additionally, we brought in a consultant to complete requirements of our contract effective January 1, 2022. This is a specialized position and one that requires experience for the position. We hired an experienced manager in May 2022 to organize the HCV program. During this audit period HUD had in place a moratorium on inspections due to COVID outbreak. We did not at this.time need to inspect units. However we did inspect units, of the 40 that had inspections we recognize as a result of the audit that we failed 14. We requested a listing of the 14 failed inspected units as a result of the audit. Senior Management was not informed during the audit process, rather during the reporting phase of the audit. Once we received the 14 names we reviewed them. Upon first inspection two of the names immediately were known. One of the persons was living in a situation where she would not have been able to pass inspection, she was a Choice for Independent living recipient approved for services by Medicaid. She was assigned to a case manager and should have been receiving services in her existing housing, however area agencies were unable to provide services per her eligibility requirements and therefore we placed her on our waitlist and worked towards housing her. She was transferred to our housing and is receiving services effective January 2022. During her first months with us she received inspections regularly to ensure that she would not fail and be in jeopardy of eviction. She is now receiving services, doing well and passing inspections. The second person was one of our Choice for Independent living residents in one of our units, his unit failed inspection on Sept. 20, 2021 and a work order for repairs was completed on October 14, 2021, which was within the 30 day re-inspection process. However this was not reported in our housing software, rather was in our work order software. We identified that three of the additional tenants that failed inspection had been re- inspected in May of 2021 and had passed within a few days of their inspection which was under 30 days, however once again was not reflected in our software. During our review process it became known to us that there is a flaw in our software package that we have been addressing with PHA Web for some time. We are working towards accurate notifications within our software. Additionally, during the period of time reviewed we had staff shortages due to COVID positive employees and a needed to change work schedules to maintain our properties effectively. We had created a practice of quarantining due to exposure and or symptoms which affected our HCV inspection staff members, both having tested positive with symptoms. Corrective Actions: We recognize and appreciate the information to work towards improvement of our HCV program. In May 2022 we hired a new Manager for our HCV program. The new Manager is working on preparing a new administration plan to be implemented for our HCV program. The new Manager is working on hiring a team and organizing existing staff to ensure that necessary details including inspections and follow up inspections are kept on track as required and documented properly. There is a process in place for HQS inspections to be followed and reports will be utilized. We have worked on training additional staff members and certifying them in HQS inspection process to ensure inspections are done timely. All our current voucher holders will be receiving a scheduled inspection to create a baseline and to move forward effectively. We anticipate completion of inspections according to our plan to be within six months of this report.

The District submitted, for reimbursement via the Emergency Connectivity Grant Fund (ECF), approximately $210,000 dollars for ipads, which had been received prior to the eligibility date of the grant, July 1, 2021. These ipads having been received by the IT department, at the Districts main Education Center office, after July 1, 2021, were reported and recorded as July 2021 eligible transactions. It was subsequently determined this shipment was actually received on June 29, 2021 at the Districts distribution center, therefore making this specific shipment ineligible for grant reimbursement. Upon identification of this error, the District immediately contacted the grant management organization, appraised them of the situation, and were allowed to provide other eligible ipad purchases, as reimbursement backup. Management has proposed additional cutoff testing processes as part of our year end processing, including review and audit of material transactions to ensure recording in proper year. Management has also provided additional training to staff members, on correct cutoff processing and the requirement for original shipping documents and receiving support. The District has also implemented a change in process, whereby all technology purchases will be delivered directly to the IT department at the main Education Center location to ensure appropriate receipt dates and documentation is provided.

The District submitted, for reimbursement via the Emergency Connectivity Grant Fund (ECF), approximately $210,000 dollars for ipads, which had been received prior to the eligibility date of the grant, July 1, 2021. These ipads having been received by the IT department, at the Districts main Education Center office, after July 1, 2021, were reported and recorded as July 2021 eligible transactions. It was subsequently determined this shipment was actually received on June 29, 2021 at the Districts distribution center, therefore making this specific shipment ineligible for grant reimbursement. Upon identification of this error, the District immediately contacted the grant management organization, appraised them of the situation, and were allowed to provide other eligible ipad purchases, as reimbursement backup. Management has proposed additional cutoff testing processes as part of our year end processing, including review and audit of material transactions to ensure recording in proper year. Management has also provided additional training to staff members, on correct cutoff processing and the requirement for original shipping documents and receiving support. The District has also implemented a change in process, whereby all technology purchases will be delivered directly to the IT department at the main Education Center location to ensure appropriate receipt dates and documentation is provided.

CORRECTIVE ACTION PLAN Walkerville Public Schools is in agreement with the finding identified and respectfully submits the following Corrective Action Plan for the year ended June 30, 2022. 2022-001 Excess Food Service Fund Balance The food service fund balance ended June 30, 2022 with an excess allowable fund balance. This occurred due to delays in the global supply chain which did not allow us to complete our cafeteria and kitchen remodels as planned. The district's responsible parties include the Food Service Supervisor (Sheri Boes), the Superintendent (Dr. Thomas Langdon) and the Business Manager (Sandra Oomen). All of these individuals have been made aware of the issue and discussed the possibilities to reduce the fund balance for the 2022-2023 school year. The focus of the District to reduce the fund balance will be to: ? Complete the remodel of the kitchen and cafeteria area ? Continue to purchase supplies, equipment, and services that add value to our food service program Implementation and Monitoring: The district will be implementing the purchase of these items throughout the 2022-2023 school year, with all purchases being received no later than June 30, 2023. The Business Manager will monitor the process to determine if additional fund balance will need to be spent throughout the fiscal year to comply with current regulations. The Business Manager will continue dialogue with the Food Service Supervisor and Superintendent throughout the year to keep all parties current on the fund balance status and will update the plan on spending fund balance if needed. If the Michigan Department of Education has any questions regarding this plan, please contact Sandra Oomen at 231-873-4850 ext. 3323 or soomen@walkerville.kl2.mi.us.

In reconciling the cash payments received for the CCBHC grant during the year, the auditors identified approximately $118,000 in expenses that were requested for reimbursement in error. This amount will be reported as deferred revenue in the Center?s financial statements. The CCBHC grant period ends on August 30th each year, so this allows the Center adequate time to reconcile this grant before the end of the grant period. The Center has created a reconciliation to help with reconciling amounts that are requested for reimbursement each month. Each month there will be a reconciliation between the trial balance and the amounts submitted to be drawn down from the grant. The expenses included in the general ledger will be reviewed to ensure they are allowable and adequate expenses, and the amounts submitted through the Payment Management System will also be reviewed. The expenses in the general ledger will be kept in an Excel spreadsheet to ensure that the Center has not over or under drawn monies from the grant.

Audit Period: Year ending June 30, 2022 The findings from the June 30, 2022 schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the number assigned in the schedule. FINDINGS ? Major Federal Award Program Audit 2022-001 ? Cash Management Recommendation: We recommend the Organization improve its policies and procedures for reviewing reimbursement requests. Action Taken: Management concurs with the finding. The error occurred in second month of fiscal year before enhanced internal controls were implemented following the finding from the prior year?s audit. Controls implemented include a reconciliation process to ensure accuracy of reimbursement requests, improved record retention procedures, and documented standard operating procedures. Management considers this recommendation closed. If you have any questions regarding this plan, please contact Kevin B Perkins at (520) 647-8375. Sincerely, Kevin B Perkins, CFO Critical Path Institute

CORRECTIVE ACTION PLAN Name and Number of the Project: See below Audit Firm: M Group, LLP Audit Period: The year ended December 31, 2022 Projects: Afton Gardens, LLC (FHA/Contract No. VA36L00002) $1,223 Boulder Creek, LLC (FHA/Contract No. SC 16M000064) $2,897 Brentwood Crossing, LLC (FHA/Contract No. NC19M000070) $4,457 Brittany Woods/Park Chase, LLC (FHA/Contract No. GA06L00060) $7,933 Cedar Moor, LLC (FHA/Contract No. NC19L000146) $2,296 Crescent Hills, LLC (FHA/Contract No. SC16M000062) $5,071 Spring Grove, LLC (FHA/Contract No. SC 16L000003 and SC 160056002) $3,122 Temple Court, LLC (FHA/Contract No. FL29A002001) $239 Timber Ridge, LLC (FHA/Contract No. NC19M000088) $8,980 Roosevelt Gardens, LLC (FHA/Contract No. SC16M00005l) $1,754 Gretna Village, LP (FHA/Contract No. 02-1709-HF/SP and 02-1710-HCD) $1,722 Compliance Review We concur with the findings and recommendations of our auditors regarding our noncompliance as cited in the accompanying Schedule of Findings and Questioned Costs. ACTIONS TAKEN OR TO BE TAKEN FINDING 2022-004: Section 8 Housing Assistance Payments Program, CFDA: 14.195 CORRECTIVE ACTION TO BE COMPLETED: During 2022, the Projects attempted to remit utility reimbursement funds to HUD. However, the remittance was not accepted by HUD due to insufficient information. The Projects will remit tenant utility reimbursement checks not cashed to HUD. We have prepared the corrective action plan as required by the standards applicable to financial statements contained in Government Auditing Standards and by the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principals, and Audit Requirements for Federal Awards. Any questions regarding the above corrective action plan should be directed to Mr. Michael N. Nguyen, President & CEO of Atlantic Housing Management, Inc.