Corrective Action Plans

The Financial Aid Office has added system controls that will assure that disbursements that are recorded on PeopleSoft is recorded on COD to assure that the Pell reporting requirements are executed in compliance with Federal statutes. The process consisted of creating automation that and reducing the manual intervention so that the issues preventing the Pell disbursement from being recorded on COD is reduced. We are adding automation for processing: FABATCH, ATB automation, and Citizenship automation.

Review of Claim Forms and Expenditure Reconciliation Recommendation: We recommend that there is an appropriate reviewer of each grant claim and monthly reconciliation. Action planned/taken in response to the finding: Management will evaluate their current processes and procedures during staffing transitions in fiscal year 2025 to ensure that proper review of claim forms and expenditure reconciliation. Names(s) of the contact person(s) responsible for corrective action: Paul Kunesh and Brian Johnson Planned completion date for corrective action: December 31, 2025

Item: 2024-003 Assistance Listing Number: 93.940 Programs: HIV Prevention Activities Health Department Based Federal Agency: U.S. Department of Health and Human Services Pass-through Agency: Arizona Department of Health Services Compliance Requirement: Reporting Criteria or Specific Requirement: Per the grant agreements, award recipients are required to submit monthly reimbursement report within a set number of days after month end. Condition: Financial reimbursement reports were submitted after the required due date. Name of Contact Person: Rosalie Johnson, Chief Financial Officer Phone Number: (602) 595-8109 Anticipated Completion Date: January 1, 2025 Views of Responsible Officials and Corrective Actions: Management agrees with the finding. The Organization will submit required reports timely going forward.

Item: 2024-001 Assistance Listing Number: 93.914 Programs: HIV Emergency Relief Project Grants Federal Agency: U.S. Department of Health and Human Services Pass-through Agency: Maricopa County Department of Public Health Services Compliance Requirement: Allowable Activities and Costs Criteria or Specific Requirement: In accordance with 2 CFR 200.405 - Allocable Costs - (d) If a cost benefits two or more projects or activities in proportions that can be determined without undue effort or cost, the cost must be allocated to the projects based on the proportional benefit. Condition: Costs charged to the federal program were based on an allocation methodology that was not properly updated for the current period. Name of Contact Person: Rosalie Johnson, Chief Financial Officer Phone Number: (602) 595-8109 Anticipated Completion Date: January 1, 2025 Views of Responsible Officials and Corrective Actions: Management agrees with the finding. The Organization will update allocations timely going forward.

Consolidated Health Centers Grant – Assistance Listing No. 93.224 & 93.527 Recommendation: Our auditors recommended the Organization to review internal controls in regards to the approval of federal fund drawdown requests. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: We have reviewed all our internal controls to ensure all approvals are documented. The procedure has been updated to include preparing the draw documentation, entering the accounts receivable invoice into the accounting system, which now requires an approval for all accounts receivable invoices. Once the accounts receivable invoices are approved in the accounting system then a draw down can be requested in the payment management system. This new process to ensure the documented approval of federal fund drawdown's was implemented mid-year 2024, after the three selections in this finding were completed.

AUDIT FINDINGS 2024-001: In one of 25 selections for testwork over period of performance, expenditures related to contract labor were submitted for reimbursement to the Federal Emergency Management Agency (FEMA) that were outside of the project period. Further, the review performed over expenditures was not completed appropriately to identify this error, this is an instance of the District’s internal control not operating as designed. Name of Contact Person: Daria Heimerman, Director of Financial Reporting, dtheimerman@evergreenhealthcare.org Corrective Action Planned: Assess process and controls for improvements to identify expenditures incurred outside of the designated project period. Anticipated Completion Date: August 2025 Statement of Concurrence or Nonconcurrence: Management concurs with audit finding 2024-001.

We accept this finding as per 2 CFR 200.303, a formal documented review and approval process over the indirect cost calculations and online reimbursement requests was not reviewed or approved by someone other than the preparer prior to submittal to the grant agency. We have taken steps to correct the issue as of June 1, 2025. The Accounting Manager will send the monthly indirect cost allocation report to the Executive Director to review and approve prior to beginning any month-end billing process so if corrections are needed, they can be made prior to reimbursement requests being sent to the grant agency. We have also implemented a new month-end process as of June 1, 2025, for the Accounting Manager to provide a detailed GL report to each Program Manager to review and approve program expenses for the given month prior to any billing requests being submitted to the grant agency.

The Housing Authority takes the recommendation from the audit regarding CFP. All CFPs after 2021 have been designated 25% to operating. CFP 21 was changed with permission from the Portfolio Manager at the time and the annual plan included this money to go to operating. All future designations in EPIC will show the amount to go to operating. However, the HA is not currently able to access CFP 21 in EPIC to edit it – it is locked.

Action Taken: Management agrees with the finding noted above. Management will also note that as a repeated finding we do not so much offer a corrective action plan as we do a summarization of steps already taken to close this finding for fiscal 2025. A new and highly qualified Chief Financial Officer with over 30 years of public housing experience was hired by the agency in April of 2024. The CFO has fully staffed the department with competent and qualified individuals including a new and fully qualified Controller and Director of Finance. All individuals hired have received targeted training from both internal and external sources. In June 2024 the new financial management team implemented a policy/procedure for the records requirement and payment timeframes for all capital fund draw downs. This policy requires the hand signing of eLOCCS forms and reconciliation of individual draws at the time of drawdown. During fiscal 2025 the entire Finance staff was trained extensively on all matters related to HUD accounting. Specific training was directed to the Capital Fund program, its eligibility standards, accounting processes, and drawdown procedures. This training was conducted by a nationally recognized HUD-specific trainer. The Authority has hired a qualified, experienced internal auditor. The internal auditor has completed a 100% testing sample on capital fund draws made in fiscal 2025. His observations were rectified, and the policy revised where needed. The sampling assured that supporting documentation was sufficient for audit, that it matched the amounts drawn, and that invoices were paid within HUD dictate s timeframes. Management feels that with this policy and enhanced testing in place the finding will not be repeated in 2025. Management expects closure of this finding, under the direction of the Chief Financial Officer, for the Fiscal 2025 audit.

Finding 2024-02 – Material Weakness in Internal Control over Compliance with Allowable Costs and Reporting Management agrees that due to turnover in staff during 2023 and 2024, there were gaps in communication leading to the cost allocation formulas and leadsheet account reconciliations not being updated on a continuing basis as reimbursement requests were being to the California Department of Social Services. Management believes that all key accounting positions have since been filled by qualified personnel. A formal close process and reconciliation of all balance sheet accounts and indirect cost allocations each month will ensure reimbursement requests are complete and accurate. Process documentation is also being prepared to help personnel in the accounting department follow proper control procedures. Action: Develop and document process for drawdown calculation and year end reconciliation to accounting records. Due Date: 10/1/25 Staff: Carrie Castillo, Executive Director

Revew and Update: Accounting and Personnel Policies and Procedures and update to follow OMB's Uniform Administrative Requirements, Cost Principals, and Audit Requirements for Federal Awards (UG).

We agree with the auditor’s comments and the following action will be taken to improve this situation. Second Harvest staff are currently developing an appropriate cost allocation plan which will address direct costs and indirect costs including salary, fringe benefits, and non-salary costs. Through this process a spreadsheet will be developed to better distribute costs appropriately across all federal programs operated by Second Harvest and efforts supported through additional funding sources. This corrective action will be implemented by October 1, 2025.

Continuum of Care -Assistance Listing No. 14.267 Recommendation: We recommend that management implement a policy that both the preparer and reviewer {two separate individuals) of the drawdown requests document each of their sign offs upon completion of their process, including review of the matching requirement. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The preparer of the reimbursement and match documentation will be a different person than the person who draws down funds from the ELOCCS system. The preparer will sign and date the reimbursement packet that is presented to the finance staff for review prior to draw down. A separate person will approve the reimbursement packet and will draw down funds from the ELOCCS system. Name{s) of the contact person{s) responsible for corrective action: Laura Caldwell, President & CEO Planned completion date for corrective action plan: July 15, 2025

Responsible Official’s Response: Management agrees with the recommendation to establish and follow a documented internal control process over the review of reporting. Staff will work to develop an appropriate internal control process and once the process has been developed staff will document in writing the process and review it with department leaders. Additionally, staff members working in areas concerning this process will be trained to ensure process adherence.

FEDERAL AWARDS—CORRECTIVE ACTION PLAN REFERENCE # 2024-001 Federal Transit Cluster - ALN Number: 20.507; 20.525; and 20.526 Contract Number: C40261TECHINSP; C33941EFA-MTAB; C40265TECH-MTAB; U3NY-2023-101-02 and U9NY-2018-059-01 Significant Deficiency-Non-Compliance Agency: U.S. Department of Transportation Criteria: Activities Allowed/Allowable Costs/Cost Principles including Indirect Costs––Direct - As stated in Uniform Grant Guidance - §200 Requirements for Allowable Costs: a. Costs did not consist of improper payments, including (1) payments that should not have been made or that were made in incorrect amounts (including overpayments and underpayments) under statutory, contractual, administrative, or other legally applicable requirements; (2) payments that do not account for credit for applicable discounts; (3) duplicate payments; (4) payments that were made to an ineligible party or for an ineligible good or service; and (5) payments for goods or services not received (except for such payments where authorized by law). Condition/Context: The MTA has Activities Allowed/Allowable Costs/Cost Principles including Indirect Costs procedures in place. MTA has corporate policies and procedures regarding Activities Allowed/Allowable Costs. We tested the Federal Transit Cluster’s Allowable Costs compliance. Based on our review of sixty samples related to Personnel Services and Other than Personnel Services for this cluster, we noted that four samples related to an MTA Bus Company personnel’s hourly rate were charged at higher rate. We noted that the rate per personnel file and employee payroll register differs from the actual rate used by the agency to charge labor costs. The agency calculated labor cost using the annual earnings that is divided by 52 weeks because there are 52 weeks a year, but MTA payroll department used 52.1428 weeks based upon 365/7 days a week, which created variances in labor costs billed and actual recorded labor costs. For Contract # - U3NY-2023-101-02 and U9NY-2018-059-01 – We noted two instances of sixty samples reviewed where the agency used 2023 approved overhead rate of 98.18% instead of the 2024 approved overhead rate of 98.98%. Recommendation: We recommend that MTA ensure that all personnel are reviewed and should be charged at the correct hourly rates as required by §200 CFR Subpart E – Allowable Costs. We also recommend that approved indirect rate applied to direct costs. Corrective Action Plan: MTA Bus will work with the project team to implement the correct rate and calculate the variance. MTA Bus will return the credit to the FTA as needed. Going forward, MTA Bus will review the employee wage rates from the official data sources to ensure that the correct rates are applied. SIR Finance will ensure that the overhead rates on the labor sheets are reflecting the correct percentage by adding a "verification measure" to a checklist while performing internal audits and approvals of the invoices prior to submission. Additionally, SIR-Finance will adjust the formatting within the invoice spreadsheets for easier visibility to a potential error in the calculated overhead percentage. Action Date: MTABUS – 1ST QUARTER 2026 SIRTOA - Effective Immediately - on July 2025 Invoices Final Implementation Date: MTABUS – 2ND QUARTER 2026 SIRTOA – July 2025 Name And Phone Number of Person Responsible For Implementation: MTABUS Marixsa Rivera Assistant Budget Chief • Project Development 718-927-8056 SIRTOA Marissa Rand Assistant Director, Finance & Timekeeping - SIR 347-694-6448

Finding 2024-003 See response to finding 2024-002.

OICA has instituted a new policy and procedure whereby all grant-related expenditures shall be reviewed by both the Finance Team and the Grant Administration team to ensure that spend is both appropriate and in line with budgeted expectations. Included in this new policy is the requirement that requests for funds under the grant be accompanied by evidence that there is a prior disbursement or existing obligation.

See response to finding 2024-001.

The Organization acknowledges the finding. This was an isolated clerical error made by the staff responsible for preparing the reimbursement documentation. Although an employee already fully allocated to other programs was mistakenly included in the claim, the Organization had sufficient allowable personnel expenses from other staff who were not fully allocated to federal programs. These resources could have been properly used to support the claim. Program operations continued without disruption and were not affected in any way, as there were adequate personnel costs available to sustain the program throughout the period. To prevent recurrence, the Organization is reviewing and strengthening its internal review procedures related to grant allocations and payroll backup. Additional training and oversight will be provided to ensure that future claims are accurately supported by allowable personnel costs.

Response to Schedule of Findings for the Year Ended December 31, 2024. 2024-001 TANF Voucher Controls The Administration of HONOR acknowledges the finding identified in the 2024 Financial Audit concerning the inadequacy regarding "TANF Voucher Controls". The following response outlines the steps the HONOR Administration, and Management will take to address these issues and prevent recurrence. During the 2024 audit process, RBT identified the following Significant Deficiency: "Per the Orange County DSS contract, monthly vouchers are to be submitted with bed counts for reimbursement of shelter services provided." HONOR Executive Director, along with the assistance of the Administrative Team, conducted a thorough review to identify the root cause of this issue. - Inadequate Verification Processes: As outlined in audit by RBT there is not an internal control, (check and balances) comparing bed-sign in sheets, rosters, and vouchers. - Lack of consistency due to staff vacancy in the positions directly responsible for the successful and routine management and undertaking of the shelter census data. In response to the audit findings, the Executive Director, with the assistance of the Administrative Team, implemented the following corrective measures: -Ensure source documents are correct by providing comprehensive staff training: A training program will be initiated for all relevant staff, focusing on this regulatory required task. Staff will receive in-depth training on nightly bed sheets and data entry of client attendance in the EMR system, (NETSMART), to generate an accurate attendance roster. - Revamping Verification Procedures: HONOR has designated a position, Administrative Response Coordinator, to be responsible for verifying the nightly bed sheets and roster at the end of the month. Any discrepancies are reported to the Shelter Manager for verification. If changes are to be made, documentation will be made on the bed sheets and data entry will be corrected in NETSMART and roster reprinted. -HONOR has created a billing cover sheet that the designated program administrator will complete when billing is submitted to the fiscal office. Signatures indicating approval for billing after a review of documentation are required. Billing will not be accepted without the form attached. (attached) Forms will be distributed at the next scheduled Management Team Meeting. Explanation and training will be included. -Periodic Reviews: The Executive Director will Chair, with the assistance of the Administrative Team, a regular review process to monitor TANF voucher controls ensuring ongoing compliance and addressing any trends proactively. HONOR's Executive Director along with the Administration and Management teams take this audit finding seriously and are committed to strengthening our internal controls to prevent future incidents. The steps outlined above will help us maintain compliance and ensure the proper use of resources. HONOR thanks RBT for their due diligence in bringing this matter to our attention.

Internal Control over Compliance and Compliance with Cash Management Requirements  Contact: Chad Bender  Title: Controller  Phone Number: 202-785-0072 Estimated Completion Date – ongoing  Corrective Action  During 2024, PSI refined its method for calculating drawdowns on federal awards in response to the 2023-03 finding and has worked with the Program Management Teams on the monthly cash projections. This led to more accurate drawdown calculations in the latter half of 2024. PSI will continue training with the Program Management Teams and cash projections in 2025.

Name of auditee: Dolan Manor II HUD auditee identification number: FHA/Contract 053-EE072 Name of audit firm: O. Douglas Covington, C.P.A., P.A. Period covered by the audit: January 1, 2024 thru December 31, 2024 CAP Prepared By: Name: Kenya Owens Position: Vice President of Operations Telephone: 336-944-5847 1. Finding 2024-001 a. Comments on the Finding and Each Recommendation At the time of audit, we are in agreement with the findings. b. Action(s) Taken or planned on the finding Due to an oversight on management duplicate invoices was submitted and approve through HUD. We have since corrected and returned the duplicated funds in the amount of $2,077.59 from the operating account back to the reserves account. *Regional Compliance Manager will review prior RFR previously submitted.

We will obtain written documentation of the period of performance for all applicable projects to ensure compliance.

As with Finding 2024-002, employees will now use the time tracking software to log fleet assets with time entries. All submissions will be reviewed and approved by someone other than the submitter or Line Foreman.

We have implemented a time tracking software feature allowing employees to associate fleet assets with their time entries. Entries will be submitted by the employee or Line Foreman, then reviewed and approved by a separate supervisor or manager.