Corrective Action Plans

A policy will be put in place that only funds that approved by HUD will be withdrawn from the replacement reserve account. The policy will be in place and effective by May 31, 2026.

A policy will be put in place that only funds that approved by HUD will be withdrawn from the replacement reserve account. The policy will be in place and effective by May 31, 2026.

2025-001 Reportable Condition — Compliance: Condition: The Organization did not receive HUD authorization for three withdrawals from the Residual Receipts account totaling $18,354 during the year. Action taken: $5,000 has been returned to the Residual Receipts account. Contact person: Nancy Jordan Completion date: May 15, 2025 Explanation of Disagreement: Not applicable Repeat finding: No

Franklin County Department of Job and Family Services will revise all subaward and contract boilerplates issued post July 1, 2026, to reflect that any deviations from the stated invoice submission schedule must be authorized in writing by FCDJFS. Additionally, internal process and training documents will be revised to align with this process. FCDJFS staff responsible for federal subawards and contracts will be trained on the new process by or before July 1, 2026.

Views of Responsible Officials: Management acknowledges this finding, which is a repeat of finding 2023-004. While management believes that appropriate review and approval of drawdown requests occurred during the fiscal year, we recognize that the lack of documented evidence constitutes a control weakness. ICFJ will implement a formal drawdown request procedure requiring that each request be accompanied by a supporting calculation schedule and documented evidence of independent review and approval, evidenced by signature and date, prior to submission to the funder. All drawdown documentation will be filed centrally and maintained for audit retrieval.  Anticipated completion date: 9/30/26  Responsible position: Chief Financial Officer

Finding 2024-005 – Duplicate Reimbursement Request for Federal Award Expenditures (Material Weakness) Criteria: CFR §200.403 and related provisions, costs charged to federal awards must be accurate, allowable, and not charged or reimbursed more than once. Additionally, reimbursement requests must be supported by complete and accurate records to ensure compliance with federal requirements and prevent improper payments. Condition: During our testing of expenditures and reimbursement requests for the above-referenced federal program, we identified that certain expenditures were submitted for reimbursement twice across twoseparate fiscal years. While the underlying expenditures were incurred only once, and not paid twice by the entity, they were included in reimbursement requests in two different periods, resulting in The Town receiving duplicate reimbursements for the same costs Cause: The duplication likely occurred due to changes in financial staffing for The Town. Specifically: • Turnover in personnel resulted in a loss of institutional knowledge regarding prior reimbursement and submissions. • Inadequate review controls allowed previously reimbursed expenditures to be re-submitted in a subsequent period. • Initial reimbursement requests appear to have used an alternate methodology for reimbursement requests. Context: The Town administers multiple federal awards and is responsible for preparing and submitting reimbursement requests based on incurred allowable expenditures. During the audit period, The Town experienced staff turnover and changes in key financial and grant management roles. These changes affected the continuity of oversight and the tracking of cumulative expenditures and prior reimbursement requests. As a result, controls over the review and reconciliation of reimbursement submissions were not consistently applied, contributing to the resubmission of previously reimbursed expenditures in a subsequent year. Recommendation: We recommend that the entity: • Reconcile all reimbursement requests to the underlying expenditures and prior submissions to identify and quantify any additional duplication. • Re-pay any overpayments to the federal awarding agency in a timely manner. • Strengthen internal controls by: o Implementing a centralized tracking system for all reimbursement requests and cumulative expenditures. o Establishing a formal review and approval process to verify that costs have not been previously reimbursed. o Clearly document roles and responsibilities, especially during staffing transitions. • Provide training to staff involved in grant management to ensure compliance with federal requirements. Corrective Action Plan: The Town of Lakeview has taken significant organizational and procedural steps to strengthen its administration of federal awards and ensure future compliance with Uniform Guidance reporting requirements. Corrective actions implemented include: • The Town has hired a Finance Director with substantial experience in state and federal grant administration and financial reporting. The Finance Director is responsible for oversight of all federal financial reporting, including review of expenditures and preparation of disbursement requests. • The Town has hired a new Town Manager who has established improved financial oversight and accountability throughout the organization. The Town Manager will work closely with the Finance Director to monitor compliance with federal grant requirements and review expenditures and disbursement requests. • The Town Council has established a Citizen Finance Advisory Committee to provide independent oversight and review of the Town’s financial management practices. The committee will review financial reports, budget performance, and federal grant administration processes, providing recommendations to improve accountability and transparency. • The Town has developed and implemented formal policies and procedures governing the administration of federal awards including: o Identification and tracking of awards o Documentation of expenditures charged to federal programso Procedures for maintaining grant files o Reconciliation of grant expenditures to the general ledger o Annual preparation and supervisory review of the Schedule of Expenditures of Federal Awards • The Finance Director will prepare disbursement requests, and they will be reviewed and signed by Council members prior to submittal. A ll disbursement requests and associated expenditures will be maintained in an electronic file system. Hard copies of disbursement requests and expenditure documentation will also be maintained in a standardized fi le system. Planned Implementation Date: The corrective actions described above have been implemented. The Town will continue to monitor compliance throughout the fiscal year, and the revised procedures will be fully incorporated into the preparation of the next annual SEFA. Responsible Person: Town of Lakeview Mayor.

FINDING 2024-008 Finding Subject: Special Education Cluster (IDEA) Contact Person Responsible for Corrective Action: Superintendent and Treasurer Contact Phone Number and Email Address: Kyle Neukam; 812-752-8921; kneukam@scsd2.k12.in.us Casey Cheatham; 812-752-8949; ccheatham@scsd2.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: The School Corporation partnered with Mazi Education for oversight. Separate funds are maintained for each project year. Payroll mapping has been corrected and reimbursement requests are based on ledger activity with supporting documentation. Transfers are documented and restricted. Monitoring procedures ensure ongoing compliance. The School Corporation has implemented procedures designed to strengthen the control environment, improve risk assessment and information and communication processes, enhance control activities, and provide ongoing monitoring to ensure compliance with Special Education grant requirements and timely identification and correction of deficiencies. Anticipated Completion Date: August 2026

CORRECTIVE ACTION PLAN (Concerning Finding 2024-001) Contact Person Responsible for Corrective Action: Dana L. Gendreau, Interim County Administrator Corrective Action: The County of Aroostook acknowledges the procurement deficiency identified in Finding 2024-001. The County previously developed and formally adopted a Federal Grant Procurement Policy on February 18, 2026, establishing procedures compliant with 2 CFR 200.317–327 and Appendix II, including required procurement methods, documentation standards, and inclusion of applicable federal contract provisions. The finding is reported as a repeat finding of prior years; however, the policy establishing these controls was adopted subsequent to the period in which the procurement activity under review occurred or during early implementation of the policy. As a result, the condition identified reflects a lapse in the consistent application of newly established procedures rather than a deficiency in policy design. To address this, the County has strengthened internal controls by requiring completion of standardized procurement checklists for all federally funded purchases and implementing enhanced supervisory review of procurement files to ensure that contracts and required federal provisions are included prior to execution and reimbursement. Additional guidance has been provided to staff to reinforce compliance expectations and ensure consistent application of procurement procedures. The County will continue to monitor procurement activities to ensure full implementation of established controls and anticipates that this finding will be resolved upon demonstration of consistent compliance in the subsequent audit period. Anticipated Completion Date: February 18, 2026 (Implemented)

CORRECTIVE ACTION PLAN (Concerning Finding 2024-001) Contact Person Responsible for Corrective Action: Dana L. Gendreau, Interim County Administrator Corrective Action: The County of Aroostook acknowledges the procurement deficiency identified in Finding 2024-001. The County previously developed and formally adopted a Federal Grant Procurement Policy on February 18, 2026, establishing procedures compliant with 2 CFR 200.317–327 and Appendix II, including required procurement methods, documentation standards, and inclusion of applicable federal contract provisions. The finding is reported as a repeat finding of prior years; however, the policy establishing these controls was adopted subsequent to the period in which the procurement activity under review occurred or during early implementation of the policy. As a result, the condition identified reflects a lapse in the consistent application of newly established procedures rather than a deficiency in policy design. To address this, the County has strengthened internal controls by requiring completion of standardized procurement checklists for all federally funded purchases and implementing enhanced supervisory review of procurement files to ensure that contracts and required federal provisions are included prior to execution and reimbursement. Additional guidance has been provided to staff to reinforce compliance expectations and ensure consistent application of procurement procedures. The County will continue to monitor procurement activities to ensure full implementation of established controls and anticipates that this finding will be resolved upon demonstration of consistent compliance in the subsequent audit period. Anticipated Completion Date: February 18, 2026 (Implemented)

We agree with the recommendations offered and will establish updated policies, including a DWX Advance Funds Policy, and procedures, to address the finding while considering appropriate measures for operating programs that our government partners require to be on a cost reimbursement basis. We have addressed this finding to our government partners. The majority of our government partners fund in monthly or quarterly increments. Periodically we update our government partners on program funds that have been used or those funds that are excess. The anticipated completion date is October 2026.

Finance policy and procedure manual was updated with recommendations. See attached.

Views of Responsible Officials: IJD acknowledges that at the Statement of Financial Position date it was holding Federal funds in excess of immediate operational need. This situation was rectified shortly after, in February 2025, when the funds were used to finance IJD’s risk pool to protect investigative journalists. This use of funds was exactly in line with the proposal originally submitted to the Federal funder (USAID), and with the risk pool in place and fully financed IJD is able to continue recruiting new members and credibly offer them the protection envisioned in the original grant proposal. Name and Title of Responsible Official: Oliver Rivers, Chief Operating Officer Anticipated Completion Date: Not applicable

Root Cause Analysis: The root cause of this finding was a misapplication of the approved indirect cost rate to the appropriate Modified Total Direct Cost (MTDC) base in connection with drawdown calculations. Although The EPI Center had an approved indirect cost rate and related policy in place, the operational procedures and system configurations necessary to consistently apply the methodology were still being refined and operationalized. The EPI Center notes that a formal, written Indirect Cost Rate Policy consistent with Uniform Guidance (2 CFR Part 200) was in place at the time of award. However, during the initial year of administering a federal award as fiscal agent, the procedures outlined in the policy were not fully operationalized. This resulted in a misapplication of the approved indirect cost rate. The overdraw resulted from applying the indirect cost rate to budgeted, rather than actual, direct expenditures. Management has since recalculated allowable indirect costs based on actual expenditures and has implemented enhanced controls to ensure accurate application of the MTDC base and compliance with federal requirements going forward. Response, with details: ☒Corrective Action Plan ☐Clarification Management acknowledges the misapplication of the approved indirect cost rate and has taken immediate steps to correct the calculation and ensure full alignment with federal requirements. Specifically, The EPI Center has recalculated indirect costs based on allowable expenditures within the Modified Total Direct Cost (MTDC) base and is actively engaging with the U.S. Department of Education to determine the appropriate resolution of the overdrawn amount. Management confirms that all underlying expenditures charged to the program were allowable, allocable, and supported by appropriate documentation, and no unallowable costs were identified. Corrective Actions Management has implemented the following corrective actions to address the issue and strengthen internal controls: 1. Training and Capacity Building (Completed - April 2026) Finance staff and senior leadership have completed targeted training on the application of indirect cost requirements under Uniform Guidance to reinforce compliance expectations. 2. Recalculation and Resolution of Overdraw (Implementation Initiated) The EPI Center has recalculated allowable indirect costs by applying the restricted 8 percent indirect cost rate for Teacher and School Leader Incentive Program (TSL) grants to actual expenditures incurred during the reporting period. The program officer has been informed of the miscalculation and resulting overdraw. The EPI Center will follow all applicable agency protocols upon receiving formal guidance from the U.S. Department of Education. Management is actively coordinating with the U.S. Department of Education to resolve the calculated overdraw and will comply with all agency guidance, including repayment of any amounts determined to be unallowable. Controls are now in place to ensure that all future drawdowns are calculated based on the approved indirect cost rate applied to the MTDC base and are subject to documented review prior to submission. 3. Standardized Indirect Cost Calculation Worksheets (Completed - April 2026) A standardized indirect cost calculation worksheet will be required and reviewed prior to approval of all drawdown requests. 4. Independent Oversight (Completed – June 2025) The EPI Center has engaged a third-party controller who will review and independently validate indirect cost calculations prior to submission, providing an added layer of oversight and control. Responsible Party: Finance and Compliance Manager, Third-party Controller, CEO Timeline for Completion: May 2026

The City agrees with this finding and will train their project manager and/or department supervisor on the requirements of federal programs currently underway as well as require such training before a project commences in the future.

he City agrees with this finding. The delay in vendor payments resulted from the absence of formal written procedures governing the administration of federally funded projects and the responsibilities of project management staff. To address this finding, the City will develop and implement a comprehensive Project Management Policies and Procedures Manual establishing standardized processes for federal grant and loan administration, including cash management, documentation requirements, approval responsibilities, payment processing, and compliance with applicable federal regulations. The City will also require training for all employees and department supervisors responsible for administering federally funded projects before assuming project management responsibilities. Finance staff will monitor compliance with these procedures to help ensure timely payment of vendor invoices and adherence to federal cash management requirements.

Action Taken: The Organization has re-evaluated its internal controls related to grant budgeting with Federal agencies and cost billing expectations. The updated controls will be implemented in the next fiscal year.

Finding 2024 – 001: Restatement to Fund Balance Condition: During audit fieldwork, our testing resulted in a restatement of fund balance in order to implement GASB 96 and correct buildings, land improvements and equipment categories of capital assets that were improperly recorded in the prior year. Plan: The City will implement internal controls to properly record leases and capital assets on a timely basis prior to audit fieldwork. Anticipated Date of Completion: Updated Capital Assets Policy adopted on May 27, 2025, and applied retroactively to May 1, 2022. Name of Contact Person: Eric Dubrowski, Finance Director Management Response: As part of its internal review of capital assets, the City implemented a revised Capital Assets Policy. The revised policy significantly reduced the number of assets required to be tracked while retaining the vast majority of capital assets on the City's books, improving compliance and increasing administrative efficiency. The City also reviews the implementation of new GASB pronouncements with its external auditors in advance of each applicable reporting period to help ensure new accounting standards are implemented accurately and timely. The GASB 96 implementation has been completed, and no additional fund balance restatements related to GASB 96 are anticipated.

• Formalization of grant cash receipt procedures requiring all federal drawdowns and reimbursement receipts to include supporting documentation, grant reports, reimbursement calculations, and deposit verification.• Implementation of grant-specific reconciliation procedures between reimbursement requests, accounting records, bank deposits, and general ledger activity. • Centralized electronic retention of grant draw documentation and supporting financial records. • Increased supervisory review of federal revenue transactions and reimbursement support prior to recording within the accounting system. • Enhanced monitoring of grant receivable activity and reimbursement timelines. • Strengthened communication protocols between program management, grant administration, and accounting personnel to ensure accurate documentation retention. • Ongoing compliance training focused on federal award management, grant documentation standards, and internal control responsibilities. ACADV believes the corrective actions implemented significantly strengthen the organization's federal grant compliance environment and financial accountability processes.

The City concurs with the finding. The City is committed to updating its policies and procedures for the reimbursement/drawdown process for projects funded with multiple funding sources and is committed to improving its communication between departments to prevent duplicating reimbursement and drawdown requests. In fact, the City has already begun doing so. At the beginning of the current fiscal year (FY 2026), the City began split funding the Ventura Water Pure multi-funded projects at the point of preparation of requisitions, purchase orders, and invoices instead of performing the analysis and allocation after the fact as was done in the past. It was the result of this process that enabled the Accounting Division to identify duplicate reimbursements during its review of WIFIA drawdown requests. Once noted, the Accounting Division immediately communicated this issue to the Water Department, who then immediately notified the City’s Environmental Protection Agency (EPA) representative to determine next steps. Since then, in collaboration with the City’s EPA representative, the City did not draw down any WIFIA funds until the City incurred expenditures in excess of the amount overdrawn. Since implementing the above process, no additional duplicate reimbursement of drawdown requests has been noted. The City is committed to further strengthening its internal controls over cash management to prevent any such duplication of draw-down requests in the future. Additionally, the City’s Finance Department will increase collaboration with the City’s Water Department to further strengthen its grant policies and procedures and to further strengthen communication between the two departments to prevent duplicating reimbursement and drawdown requests.

The Department has strengthened its oversight of Medicaid financial reporting through the establishment of a Director of Audits position in September 2025. The Director of Audits will work collaboratively with the Medicaid Program, Fiscal Office, and other applicable stakeholders to monitor compliance with federal reporting requirements and ensure that adequate supporting documentation is maintained for Medicaid cost reporting activities.

VIDE is strengthening its internal controls and record retention procedures to ensure strict adherence to federal period of performance and liquidation provisions. To address the missing payment support, the department is enforcing a strict back-end system control. All required supporting documentation evidencing payment must be attached directly to the transaction entry within the ERP system prior to final disbursement. To address the specific instance regarding the missing indirect cost reimbursement report, VIDE will leverage its newly finalized Indirect Cost Standard Operating Procedure (SOP). VIDE will coordinate with the Third-Party Fiduciary Agent (TPFA) to ensure that all detailed reimbursement reports are actively verified and securely stored in a centralized repository before indirect costs are drawn down and liquidated. Furthermore, the Office of Fiscal and Administrative Services will implement a mandatory final review step during the grant closeout and liquidation phase. This review will systematically verify the presence and accuracy of all payment and indirect cost documentation within the ERP and SharePoint repositories, ensuring that all expenditures are properly supported, allowable, and completely liquidated within the mandated period of performance timeframe.

DPNR will reevaluate and strengthen its cash management policies and procedures to ensure compliance with the Cash Management Improvement Act (CMIA), Treasury-State Agreement requirements, and Federal cash management regulations. To support these requirements, DPNR alongside RMA will establish a repository that will serve as the official source of record for all drawdown activities and related supporting documentation.

The Government concurs with the auditor’s findings and recommendations. Strengthening procedures is necessary. Corrective Action Plan: - Reconcile drawdowns monthly - Assign oversight for draw requests - Conduct internal reviews

The Government concurs with the auditor’s findings and recommendations. The Department did not maintain a centralized repository for drawdown documentation. Supporting invoices and related source documents were maintained in various locations and formats, resulting in instances where complete documentation was not readily available during the audit review. The Department of Planning and Natural Resources (DPNR) with the support of the federal agency’s consultant will implement a centralized electronic repository system to serve as the official recordkeeping location for all Federal drawdown requests and supporting documentation. This repository will house all documents necessary to substantiate drawdowns, including but not limited to: • Approved drawdown requests; • Supporting invoices; • Payment vouchers and proof of payment; • Purchase orders, contracts, and agreements, where applicable; • Grant expenditure reports. • Reconciliations and any additional supporting documentation required by Federal regulations and grant terms. A standardized checklist will be developed and incorporated into the drawdown process to ensure that all required supporting documents are uploaded and reviewed prior to the submission of each drawdown request. Drawdowns will not be processed until the checklist has been completed and the supporting documentation verified.

The Government concurs with the auditor’s findings and recommendations and finalizing a comprehensive corrective action plan to strengthen grant management and compliance through the Public Finance Management initiative including the development of a three-tier overarching Financial and Compliance policy and procedures framework. The Government’s Audit Committee is leading the development of a structured, three-tier policy and procedures framework under the Public Finance Management project. This framework includes Tier 1, which establishes the overarching Financial and Compliance Policy; Tier 2, which defines Standard Operating Procedures (SOPs) to promote cross-agency consistency; and Tier 3, which outlines detailed, step-by-step procedures that clearly define roles and responsibilities and accountability measures to ensure compliance with all federal regulations including cash management. Regular training sessions will be provided to staff involved in grant management to ensure they understand and adhere to compliance requirements with monitoring and evaluation occurring by the OMB Compliance Unit supported by the Government’s Audit Committee, to assess and improve the effectiveness of controls.