Corrective Action Plans

Finding 1223715 (2024-011)

Material Weakness 2024

GA

Cash Management Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties § 200.305

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 compreh...

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.

View Audit 407222

Finding 1223690 (2024-001)

Material Weakness 2024

WHITE BUFFALO, INC.

CT

Allowable Costs / Cost Principles Internal Control / Segregation of Duties Questioned Costs

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.

View Audit 407180

Finding 1223549 (2024-001)

Material Weakness 2024

City of Pekin

IL

Cash Management Material Weakness Reporting

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. ...

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.

View Audit 406926

Finding 1223547 (2024-005)

Material Weakness 2024

Alabama Coalition Against Domestic Violence

AL

Cash Management Internal Control / Segregation of Duties

• 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 requ...

• 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.

View Audit 406922

Finding 1223468 (2024-003)

Material Weakness 2024

City of San Buenaventura

CA

Cash Management Matching / Level of Effort / Earmarking

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 drawd...

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.

View Audit 406822

Finding 1223446 (2024-098)

Material Weakness 2024

The Virgin Islands Hsg Finance Authority - Paradise Mills Apartments

FL

Internal Control / Segregation of Duties Questioned Costs Special Tests & Provisions § 200.303

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 complian...

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.

View Audit 406809

Finding 1223375 (2024-066)

Material Weakness 2024

The Virgin Islands Hsg Finance Authority - Paradise Mills Apartments

FL

Questioned Costs Cash Management Period of Performance § 200.303

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 documentat...

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.

View Audit 406809

Finding 1223361 (2024-059)

Material Weakness 2024

The Virgin Islands Hsg Finance Authority - Paradise Mills Apartments

FL

Cash Management § 200.303

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 rep...

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.

View Audit 406809

Finding 1223357 (2024-055)

Material Weakness 2024

The Virgin Islands Hsg Finance Authority - Paradise Mills Apartments

FL

Cash Management Internal Control / Segregation of Duties § 200.303

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

View Audit 406809

Finding 1223336 (2024-038)

Material Weakness 2024

The Virgin Islands Hsg Finance Authority - Paradise Mills Apartments

FL

Cash Management § 200.303

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 docume...

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.

View Audit 406809

Finding 1223332 (2024-034)

Material Weakness 2024

The Virgin Islands Hsg Finance Authority - Paradise Mills Apartments

FL

Cash Management § 200.303

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 p...

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.

View Audit 406809

Finding 1223317 (2024-028)

Material Weakness 2024

The Virgin Islands Hsg Finance Authority - Paradise Mills Apartments

FL

Subrecipient Monitoring Questioned Costs Allowable Costs / Cost Principles § 200.303

OTAG recognizes the need to strengthen internal controls related to cash management reporting, matching requirement monitoring, and grant period-of-performance compliance. A comprehensive review of existing Master Cooperative Agreement Appendices management processes has been initiated to identify c...

OTAG recognizes the need to strengthen internal controls related to cash management reporting, matching requirement monitoring, and grant period-of-performance compliance. A comprehensive review of existing Master Cooperative Agreement Appendices management processes has been initiated to identify control weaknesses and implement corrective measures. OTAG will implement tracking tools to monitor award periods, liquidation deadlines, and expenditure charging. Personnel will verify Master Cooperative Agreement Appendices periods prior to processing transactions. Expenditures charged to awards will undergo review to confirm alignment with the applicable award and performance period with cross reconciliation of the Government of the Virgin Islands procurement methods, and the Government of the Virgin Islands fiscal enterprise system. Policy and Procedure Enhancements: OTAG will update SOPPs to address cash management, reporting requirements, matching calculations, expenditure monitoring, and period-of-performance reviews. Training will be provided to personnel upon implementation of the revised procedures. Preventive Measures: •Monthly grant reconciliation reviews. •Quarterly compliance monitoring. •Management review of reimbursement requests and matching calculations. •Annual internal compliance assessment. •Centralized documentation repository for grant records. Monitoring & Accountability: The Adjutant General and Executive Director will monitor implementation and effectiveness. Quarterly compliance reports will be provided to agency leadership, and corrective actions will be tracked through completion.

View Audit 406809

Finding 1223315 (2024-026)

Material Weakness 2024

The Virgin Islands Hsg Finance Authority - Paradise Mills Apartments

FL

Cash Management § 200.303

OTAG recognizes the need to strengthen internal controls related to cash management reporting, matching requirement monitoring, and grant period-of-performance compliance. A comprehensive review of existing Master Cooperative Agreement Appendices management processes has been initiated to identify c...

OTAG recognizes the need to strengthen internal controls related to cash management reporting, matching requirement monitoring, and grant period-of-performance compliance. A comprehensive review of existing Master Cooperative Agreement Appendices management processes has been initiated to identify control weaknesses and implement corrective measures. OTAG will establish procedures requiring reconciliation of all SF-270 reimbursement requests to supporting accounting records before submission. A centralized tracking log will be maintained to ensure completeness and retention of all reimbursement requests and supporting documentation. Supervisory review and approval will be documented for each submission with cross reconciliation of the Government of the Virgin Islands procurement methods, and the Government of the Virgin Islands fiscal enterprise system. Policy and Procedure Enhancements: OTAG will update SOPPs to address cash management, reporting requirements, matching calculations, expenditure monitoring, and period-of-performance reviews. Training will be provided to personnel upon implementation of the revised procedures. Preventive Measures: •Monthly grant reconciliation reviews. •Quarterly compliance monitoring. •Management review of reimbursement requests and matching calculations. •Annual internal compliance assessment. •Centralized documentation repository for grant records. Monitoring & Accountability: The Adjutant General and Executive Director will monitor implementation and effectiveness. Quarterly compliance reports will be provided to agency leadership, and corrective actions will be tracked through completion.

View Audit 406809

Finding 1223311 (2024-021)

Material Weakness 2024

The Virgin Islands Hsg Finance Authority - Paradise Mills Apartments

FL

Cash Management Internal Control / Segregation of Duties Questioned Costs § 200.303

The Government concurs with the auditor’s findings and recommendations. DOH has implemented no corrective action, as grant is closed.

View Audit 406809

Finding 1223310 (2024-017)

Material Weakness 2024

The Virgin Islands Hsg Finance Authority - Paradise Mills Apartments

FL

Cash Management Internal Control / Segregation of Duties Questioned Costs § 200.303

As of July 2024, DOH revised drawdown Standard Operating Procedures (SOPs) to mandate that all supporting documents include a signature or initial to certify that a proper review was conducted at certification level of certification. DOH have also incorporated this updated procedure into Federal Gra...

As of July 2024, DOH revised drawdown Standard Operating Procedures (SOPs) to mandate that all supporting documents include a signature or initial to certify that a proper review was conducted at certification level of certification. DOH have also incorporated this updated procedure into Federal Grants update trainings and made it accessible to all staff on Business Process Improvement SharePoint site.

View Audit 406809

Finding 1223021 (2024-003)

Material Weakness 2024

OURSPACE WORLD, INC.

MD

Allowable Costs / Cost Principles Cash Management

Planned Corrective Action: We are in the process of drafting and implementing a new set of accounting procedures that will modify the manner in which we document and realize revenue. Therefore the revenue in reference to federal grants that provide advances will be in alignment with recognized expen...

Planned Corrective Action: We are in the process of drafting and implementing a new set of accounting procedures that will modify the manner in which we document and realize revenue. Therefore the revenue in reference to federal grants that provide advances will be in alignment with recognized expenditures. Contact Name and Title Responsible for Corrective Action Kwabena Sika, Founding Director Status: In-progress

View Audit 406581

Finding 1222924 (2024-001)

Material Weakness 2024

Pembroke Hill School

NH

School Nutrition Programs Special Tests & Provisions Allowable Costs / Cost Principles § 200.303

The district continually monitors the food service program’s cash resources. During the fiscal year, a formal written plan was submitted to and approved by NSLP and implemented to reduce cash resources so they would not exceed the three-month average expenditure threshold. Although a plan was in pla...

The district continually monitors the food service program’s cash resources. During the fiscal year, a formal written plan was submitted to and approved by NSLP and implemented to reduce cash resources so they would not exceed the three-month average expenditure threshold. Although a plan was in place, the district was unable to fully implement the plan within the allotted timeframe. Moving forward, the district will ensure that the approved plan is fully executed prior to June 30.

View Audit 406428

Finding 1222861 (2024-004)

Material Weakness 2024

State of Kosrae

FM

Cash Management Questioned Costs Subrecipient Monitoring § 200.1

Finding Number 2024-004 Corrective Action Plan (CAP) CSG will draft and implement a policy on Cash Management specifically regarding cash disbursement to vendors for infrastructure projects. • CSG will assign a designated person to request drawdowns for Infrastructure projects. This same individual ...

Finding Number 2024-004 Corrective Action Plan (CAP) CSG will draft and implement a policy on Cash Management specifically regarding cash disbursement to vendors for infrastructure projects. • CSG will assign a designated person to request drawdowns for Infrastructure projects. This same individual will keep track of this request and will notify the appropriate individuals at Chuuk State Finance who will authorize the disbursement of the check/s to the vendor. • A specific timeframe in which CSG will minimize the time between cash drawdown received from FSM National Government and disbursement to vendors will be established upon consultation with grantor agency. Anticipated Completion Date December 31, 2026 Responsible Person (Contact Details) Jonas Paul, Director (DAS) jpaulckdas@gmail.com Kayviann Hallers Umwech, Internal Control (DAS) kayviannhallers@gmail.com Roxalyn Kaminanga, Chief (DAS) roxalynkaminanga@gmail.com

View Audit 406415

Finding 1222720 (2024-008)

Material Weakness 2024

Native Americans for Community Action, Inc.

AZ

Cash Management Subrecipient Monitoring Material Weakness § 200.302 § 200.334

Finding 2024-008: Cash Management – Material Weakness Condition: As a result of the audit procedures, it was noted that the Organization did not retain copies of cost reimbursement reports submitted to the grantor for the Urban Health Clinic, Substance Abuse Prevention, and Title V programs. Correct...

Finding 2024-008: Cash Management – Material Weakness Condition: As a result of the audit procedures, it was noted that the Organization did not retain copies of cost reimbursement reports submitted to the grantor for the Urban Health Clinic, Substance Abuse Prevention, and Title V programs. Corrective Action: Management is implementing a formal process to retain all cost reimbursement reports submitted to grantors in accordance with Federal record retention requirements. NACA is also hiring and training a Grant Director to strengthen oversight of grant reporting, reimbursement processes, and documentation requirements. This will include establishing a centralized and organized filing system, to ensure all submitted reimbursement reports are maintained and accessible. As part of the monthly reimbursement and grant reporting process, staff will ensure that copies of all submissions are saved and reconciled to the accounting records. A review step will also be added to confirm that all required documentation has been retained and properly organized prior to final submission. Management will continue to evaluate and adjust processes as needed to ensure compliance and completeness. Name of Person Responsible: Walter McCullough, CFO and finance staff Anticipated Date of Completion: May 31, 2026

View Audit 406311

Finding 1222708 (2024-006)

Material Weakness 2024

Native Americans for Community Action, Inc.

AZ

Allowable Costs / Cost Principles Questioned Costs Subrecipient Monitoring

Finding 2024 -006: Overbilling of Indirect Costs – Material Weakness Condition: During the course of the audit, Baker Tilly determined that, for certain time periods, NACA applied an incorrect indirect cost rate, resulting in over billings to the funding source. Corrective Action: Along with the aud...

Finding 2024 -006: Overbilling of Indirect Costs – Material Weakness Condition: During the course of the audit, Baker Tilly determined that, for certain time periods, NACA applied an incorrect indirect cost rate, resulting in over billings to the funding source. Corrective Action: Along with the auditors and the process during the course, management disclosed and determined there was an overcharge of indirect costs. Currently, NACA is under a negotiated cost agreement. We have already disclosed the overbilling to I H S, who is our cognizant grantor, and plan is to disclose to other federal and local agencies. If needed, a payback plan will be established. Communication will be via email for documentation purposes. Name of Person Responsible: Walter McCullough, CFO Anticipated Date of Completion: April 30, 2026.

View Audit 406311

Finding 1222586 (2024-001)

Material Weakness 2024

Arctic Village Tribal Council

AK

Cash Management Questioned Costs Material Weakness § 200.305

Finding 2024-001 Lack of Internal Controls Over Cash Management Name of Contact Person: Galen Gilbert, First Chief Corrective Action Plan: In the prior fiscal year, Arctic Village Council (AVC) experienced delays in drawing down HUD funds due to staff transitions and turnover. While reimbursement wa...

Finding 2024-001 Lack of Internal Controls Over Cash Management Name of Contact Person: Galen Gilbert, First Chief Corrective Action Plan: In the prior fiscal year, Arctic Village Council (AVC) experienced delays in drawing down HUD funds due to staff transitions and turnover. While reimbursement was ultimately received, the funds were not deposited until after fiscal year-end, contributing to the reported cash management issue. To strengthen internal controls and avoid future delays, AVC will continue to follow its monthly reconciliation process to ensure that all grant expenditures are accurately aligned with drawdown activity and supported by eligible costs. In addition, AVC will explore establishing a line of credit (LOC) in FY2025 to help bridge timing gaps between expenditures and reimbursement cycles. This LOC would provide short-term liquidity support and help reduce reliance on general fund balances while awaiting federal reimbursements. Proposed Completion Date: September 30, 2025

View Audit 406180

Finding 1222572 (2024-003)

Material Weakness 2024

LIFE Academy

AL

Cash Management Procurement, Suspension & Debarment

Life Academy has adopted policies and procedures to ensure compliance with Uniform Guidance Section 2 CFR, Part 200. The district only seeks reimbursement for federal expenditures; therefore, funds are not requested in advance of the expense. This process ensures drawn downs for federal disbursement...

Life Academy has adopted policies and procedures to ensure compliance with Uniform Guidance Section 2 CFR, Part 200. The district only seeks reimbursement for federal expenditures; therefore, funds are not requested in advance of the expense. This process ensures drawn downs for federal disbursements occur after the expense to prevent excessive cash on hand. Anticipated Implementation Date: Implemented on October of 2024 Responsible Party: Chief School Financial Officer and Superintendent

View Audit 406173

Finding 1221745 (2024-005)

Material Weakness 2024

Young Womens Christian Association of Greater Lafayette

IN

Allowable Costs / Cost Principles Cash Management Reporting

Views of Responsible Officials and Planned Corrective Actions: YWCA acknowledges deficiencies in reconciliation of reimbursement claims. • Implement a standardized reimbursement reconciliation worksheet that ties each grant claim to the general ledger, payroll reports, and underlying invoices prior ...

Views of Responsible Officials and Planned Corrective Actions: YWCA acknowledges deficiencies in reconciliation of reimbursement claims. • Implement a standardized reimbursement reconciliation worksheet that ties each grant claim to the general ledger, payroll reports, and underlying invoices prior to submission. • Require documented review and approval of each claim by the designated finance team member, confirming that claimed amounts are allowable, supported, and within the grant period. • Provide staff training on claim preparation, reconciliation, and documentation retention expectations.

View Audit 406008

Finding 1221601 (2024-045)

Material Weakness 2024

Commonwealth of Puerto Rico - Department of the Family

PR

Reporting Questioned Costs Procurement, Suspension & Debarment § 200.302

VIEWS OF RESPONSIBLE OFFICIALS The Department of the Family and PR-DDS acknowledge the audit finding regarding the differences identified between the balances reported on Form SSA-4513, the PRIFAS accounting records, and the supporting documentation for unliquidated obligations. To address this issu...

VIEWS OF RESPONSIBLE OFFICIALS The Department of the Family and PR-DDS acknowledge the audit finding regarding the differences identified between the balances reported on Form SSA-4513, the PRIFAS accounting records, and the supporting documentation for unliquidated obligations. To address this issue, the following corrective actions will be implemented: 1. Monthly meetings will be held between the Department of the Family’s Finance staff and PR-DDS administrative and fiscal personnel to review and monitor all outstanding obligations and any differences identified between the PRIFAS records and the reports prepared for the Social Security Administration (SSA). 2. A formal monthly reconciliation will be performed between the balances reported on Form SSA-4513 and the financial records maintained in PRIFAS. Any discrepancies identified will be analyzed, documented, and supported with appropriate evidence. 3. Differences between the PRIFAS records and valid obligations that are not reflected in the system will be explained and documented in the comments section of Form SSA-4513, as applicable. 4. The review process for unliquidated obligations will be strengthened through periodic evaluations to identify obligations that should be modified, liquidated, or canceled in accordance with SSA requirements. 5. Written internal procedures will be developed for the preparation, review, and approval of Form SSA-4513, including the retention of supporting documentation necessary to substantiate the reported balances. Management further notes that certain obligations related to Medical Evidence of Record (MER) and Applicant Travel (AT) are authorized and monitored by PR-DDS before the related disbursements occur. These obligations are not recorded in the PRIFAS accounting system until payment is processed by the Special Payments Office (OPE). As a result, temporary differences may exist between the balances reflected in PRIFAS and the unliquidated obligations reported on Form SSA-4513. To address this situation, PR-DDS and the Department of the Family’s Finance Office have established a monthly reconciliation process to identify, document, and explain all temporary differences between PRIFAS records and the obligations maintained by PR-DDS. In addition, any significant differences will be properly disclosed and explained in the comments section of Form SSA-4513 and supported by the appropriate documentation. IMPLEMENTATION DATE The monthly meetings and formal reconciliation process began during Fiscal Year 2026 and will continue an ongoing basis. Expected Completion Date: September 30, 2026 RESPONSIBLE PERSON Ramón Luis Vargas Escalante Chief Accountant of Finance

View Audit 405849

Finding 1221551 (2024-026)

Material Weakness 2024

Commonwealth of Puerto Rico - Department of the Family

PR

Subrecipient Monitoring Cash Management Internal Control / Segregation of Duties § 200.302 § 200.303 § 200.305

VIEWS OF RESPONSIBLE OFFICIALS ADSEF is committed to a fundamental restructuring of our cash management lifecycle. By migrating drawdown processes into our ERP system, we will ensure that every request is supported by system-generated documentation, enforced through systematic segregation of duties,...

VIEWS OF RESPONSIBLE OFFICIALS ADSEF is committed to a fundamental restructuring of our cash management lifecycle. By migrating drawdown processes into our ERP system, we will ensure that every request is supported by system-generated documentation, enforced through systematic segregation of duties, and fully reconciled against the general ledger in real-time. Action Step: 1. ERP-Based SOP Manual-Implement of the Procedure Manual of ERP system. This manual will supersede legacy documentation and clearly map every procedural step to a specific ERP function. 2. Systemic Segregation ERP is configurated to enforce mandatory "Preparer" and "Approver" roles. The system will prevent a single user from both creating and authorizing a drawdown request, ensuring logical segregation of duties. 3. Automated Reconciliation-Implement a system-level control where the ERP automatically reconciles drawdown requests. Any variance will trigger a "Pending Review" flag, preventing unauthorized processing. 4. Real-Time Supervisory Review-Require supervisors to conduct an audit of all drawdown documentation directly within the ERP interface. No request will be released for funding without a digital system approval following a reconciliation review IMPLEMENTATION DATE During Fiscal Year 2026-2027 RESPONSIBLE PERSON Eddie J. Burgos Auxiliary Administrator for Finance and Budget

View Audit 405849

Corrective Action Plans

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