Corrective Action Plans

Corrective Action Plan 2024-003 Delayed Completion and Submission of Single Audit Condition Found The Village did not complete and submit its Single Audit for the fiscal year ended December 31, 2024, within the required timeframe. Management determined that the Village had expended federal awards in excess of the Single Audit threshold only after the required audit planning and reporting timeline had been delayed. The delay occurred because the Village’s grant tracking process/system did not allow management to separately identify, classify, and monitor federal grant awards and expenditures apart from state grant awards and expenditures. As a result, management did not timely determine whether the Village met the federal expenditure threshold requiring a Single Audit for the fiscal year ended December 31, 2024. Corrective Action Plan 1. Deficient Grant Tracking System / Process: The Village has completed our ERP implementation of Munis of Tyler Technologies. This allows for better review of grant tracking and cleaner allocations. 2. Inadequate Internal Controls Over Federal Awards: The Village has documented new post-award policies under Uniform Guidance (2 CFR 200). Moving forward, both the managing department head and the Finance Director will sign off on the intake, classification, and tracking of new grant agreements to ensure proper oversight from day one. 3. Absence of a Formal Review Process: The Village will institute a mandatory quarterly threshold review and a comprehensive year-end pre-audit checklist. Prior to fiscal year-end, the Finance Department formally aggregates all active grant expenditures to evaluate whether federal outlays meet or exceed the $750,000 Single Audit threshold, ensuring early audit planning. Responsible Person for Corrective Action Plan Chris Frankenfield- Finance Director Implementation Date of Corrective Action Plan 1. August 18, 2025 2. March 31, 2027 3. March 31, 2027

The fiscal officers of the MOF Budget Division have strengthened their review of expenditures prior to disbursements and started to conduct weekly evaluation and monitoring of draw downs.

Condition 1. Item 1. A financial reporting tool was recently established to support the timely preparation and submission of reports. Additionally, the Ministry recruited a Senior Financial Analyst in February to oversee the monitoring, preparation, and timely submission of financial reports. Condition 2-1. Items 1-2 Effective FY2025, the Accounting Division is now required to prepare drawdown request forms using the detailed expenditure report (journal listing). Each request is submitted to the Finance Secretary only after approval by Accounting Management. Condition 2-2. Items 1-21 A financial reporting tool was recently established to support the timely preparation and submission of reports. Additionally, the Ministry recruited a Senior Financial Analyst in February to oversee the monitoring, preparation, and timely submission of financial reports. Condition 2-3. Items 1-2 Effective FY2025, the Accounting Division is now required to prepare drawdown request forms using the detailed expenditure report (journal listing). Each request is submitted to the Finance Secretary only after approval by Accounting Management. However, the Ministry disagrees with the finding on the SF-425 not containing the SPG code since the latter is not a required US field. SPG code is internal to the MOF. Grant number D22AP00180 is also established in the FMIS as part of the setup of SPG 10450101.

Effective FY2025, the Accounting Division is now required to prepare drawdown request forms using the detailed expenditure report (journal listing). Each request is submitted to the Finance Secretary only after approval by Accounting Management.

The City has strengthened its review and approval procedures for federally funded expenditures to ensure appropriate management oversight prior to payment. Vendor invoices and reimbursement requests are now reviewed and approved by City management before payment is processed, and employee timesheets charged to federal awards require supervisory approval prior to payroll processing. These procedures reinforce compliance with the City's expenditure approval process and provide additional oversight to ensure allowable costs are properly reviewed and approved before reimbursement or payment. These procedures have been implemented and will be followed for all federally funded expenditures on an ongoing basis.

See 2024-006. This issue has been eliminated as we will have none going forward.

This problem only applied to the HHS program that was eliminated in December 2023. All other programs that we contract with are paid in arrears and there are no advances. We have proposed a settlement agreement with HHS to eliminate the overpayment and interest. Benjie Read will be responsible for the settlement agreement, by October 31, 2026.

Management is aware of the difficulties relating to the 2024 audit process and has brought in a new finance director in late 2025 to ensure documentation is consistent for these allowable costs going forward.

The reporting for these has been updated and submitted. In 2024, I was not a part of the e-mail directing these to me - corrected and now processed timely.

Finding 2024-006: Lack of Management Oversight over Drawdown Requests As the previous employees responsible for these functions did not perform them effectively, the organization now has such in place, whereas a drawdown process has been implemented. As the organization’s drawdowns are typically designated to cover payroll costs, this process now includes the following: • A drawdown allocation schedule for the employee’s making up the amount requested • A budget breakdown by department for the amounts making up the drawdown request • A supporting schedule and related invoices for amounts to be reimbursed (e.g., malpractice insurance, etc.) • A completed Standard Form (SF) 270 that tracks the applicable grant amounts previously drawdown that also specifies the amount to be currently drawn.

IIW acknowledges the finding regarding the allocation of payroll expenses to federal awards during the period July 2023 through October 2023. FY2024 was a significant transition period for IIW. New payroll and financial systems were implemented during the transition period from June 2023 through January 2024, and management implemented significant corrective actions related to payroll allocation beginning in November 2023. These corrective actions included transitioning away from the prior budget-based payroll allocation methodology, strengthening timekeeping and payroll processes, implementing procedures designed to document actual employee activities, and enhancing supervisory review of payroll allocations. Although aspects of the prior-year condition affected the July through October 2023 period of FY2024, significant corrective measures were implemented during FY2024 beginning in November 2023. IIW continued strengthening these processes throughout FY2024. Corrective Actions Implemented and Ongoing • Implement and maintain written payroll allocation policies and procedures. • Utilize systematic timekeeping practices designed to document actual employee activities. • Allocate payroll costs based on actual work performed and appropriate supporting documentation. • Maintain supervisory review and approval procedures over employee time reporting and payroll allocations. • Maintain appropriate levels of management review and oversight to provide checks and balances over payroll reporting and allocation. • Periodically review payroll allocations for consistency with actual employee activity and make adjustments when necessary. Contact Persons Responsible for Corrective Action Paul F. Trebian, President & CEO Estela Vazquez-Ornelas, Vice President Anticipated Completion Date Significant corrective actions were implemented beginning in November 2023 and continue to be monitored and enhanced as necessary to ensure compliance with federal award requirements.

Finding #2024-002 Section 202 Supportive Housing for the Elderly – (Capital Advance); ALN 14.157: Recommendation: We recommend that management implement procedures to ensure that required funds are deposited into the residual receipts reserve account in the future within the 60-day requirement. Action taken: Smokey Hollow Apartments agrees with the auditor’s recommendations and will implement procedures to ensure timely and accurate deposits in the future. For questions regarding this corrective action plan, please contact John Lutz, Vice President of Financial Strategy, at (315) 424-1821.

2024-011 Timely Grant Draws Material Weakness Recommendation: The Housing Authority should adopt written grant draw policies into its financial policies and procedures manual. Financials should be reviewed monthly, and drawdowns made as needed. Action Taken: The Housing Authority agrees with this finding and will implement this recommendation within 120 days of this audit report.

2024-005 Timely Bank Reconciliations Material Weakness Recommendation: Implement currently adopted policies over bank reconciliations. Action Taken: The Housing Authority agrees with this finding and will implement this recommendation within 120 days of this audit report.

2024-004 Cash Management Material Weakness Recommendation: Auditors recommend filing documentation for grant draws along with payment vouchers throughout the year. Action Taken: Documentation for grant draws and expenditures to support the request for funding is vouchered along with wire transaction documentation that requires the signature of 3 Tribal Council for processing.

3. Deficiency #3 – Federal Grant Reporting a. Type of deficiency: Material Weakness – During our testing of the Port’s BUILD20 reporting requirements, we noted the SF-270 report dates were not accurate as a result of the associated expenditures being adjusted. We recommend the Port refiles affected SF-270 to match the reported expenditures for the fiscal year. b. The checklist noted in Deficiency #2 is also being used to make sure the SF-270s are correct. We are working with the Federal Highway Administration to see about refiling SF-270s. c. Already implemented.

Finding Number 2024-019 Subject Heading (Financial) or AL no. and program name (Federal) AL #84.425 – EDUCATION STABILIZATION FUND (ESF - AL #84.425U) Planned Corrective Action OSDE maintains that these procedures are adequate to ensure compliance with 34 CFR §§ 75.600–75.618. Leadership in the Office of Title Services determined that OTS did not have the staff capacity to require review of payroll certifications during the application review process; therefore, this monitoring was conducted during onsite visits. Given the limited number of project managers available to perform onsite reviews during the ESSER period, OSDE believes the sampling completed onsite was reasonable and sufficient to assess compliance. Guidance and tools were provided to LEAs to support proper implementation of prevailing wage requirements. Monitoring results are reviewed and approved by OTS leadership, and corrective actions are required when non-compliance is identified. Anticipated Completion Date Sept-25 Responsible Contact Person Tammy Smith

Finding Number 2024-044 Subject Heading (Financial) or AL no. and program name (Federal) ALN: 21.027 Federal Program name: Coronavirus State And Local Fiscal Recovery Funds (CSLFRF) Planned Corrective Action Office of Management and Enterprise Services – Grants Management Office Response: OMES-GMO respectfully disagrees with the conclusion that the variances identified in this finding represent deficiencies in internal controls over Project and Expenditure (P&E) reporting. While OMES-GMO agrees that accurate reporting is essential and remains committed to continually strengthening its reporting processes, the variances identified are primarily attributable to timing differences inherent in the State's accounting, reimbursement, and grant administration processes rather than errors in reporting or deficiencies in internal controls. Quarterly Project and Expenditure Reports submitted to the U.S. Department of the Treasury are prepared using the best information available at the time each report is due. Because agencies operate under established State accounting and reimbursement processes, expenditures are not always fully processed, approved, posted in PeopleSoft, or reimbursed by the close of each Treasury reporting quarter. Consequently, legitimate timing differences may exist between quarterly Treasury reports and subsequent reconciliations to the Statewide Accounting System. Treasury's Project and Expenditure reporting process allows recipients to update previously reported information through subsequent quarterly submissions. As expenditures are processed, accounting adjustments are completed, and additional information becomes available, corrections may be made in future reporting periods. OMES-GMO recognizes the importance of reconciling these timing differences; however, complete alignment between quarterly Treasury reporting and the Statewide Accounting System cannot always be achieved until the close of the CSLFRF period of performance, when all expenditures, reimbursement requests, accounting adjustments, and project closeout activities have been completed. For this reason, OMESGMO does not believe these timing-related variances, standing alone, constitute deficiencies in internal controls. The agencies identified in this finding provided additional information demonstrating that the reported variances were the result of normal business processes, reimbursement timing, accounting adjustments, or Treasury reporting requirements rather than inaccurate reporting or unsupported expenditures. Agency 055 confirmed that the expenditures identified by the auditors were identifiable and supported. Agency 085 explained that the reported variance resulted from a temporary operational period during which expenditures for multiple federal grant programs were processed through Class Fund 497 because other federal funding accounts were unavailable during a novation period. Those expenditures were never intended to be reported as CSLFRF costs and have since been, or are being, transferred to the appropriate federal funding sources through Journal Vouchers and reimbursement processes. Agency 090 explained that the consolidation of expenditures with Agency 423 created timing differences between reporting quarters. Agency 452 stated that the variance resulted primarily from the timing of Treasury reporting deadlines compared to the posting of expenditures in PeopleSoft, resulting in temporary differences that were subsequently reconciled. Agency 605 explained that excess advance funding was returned following contract amendments based on projected spending needs, while actual expenditures continued into subsequent reporting periods, creating temporary timing differences. Agency 619 demonstrated that the questioned expenditures were reported in the quarter in which reimbursement requests were received, processed, and submitted to OMES-GMO. In addition, one cash advance originally included in a quarterly report was removed at OMES-GMO's direction to comply with Treasury reporting guidance. Agency 800 explained that the reported variance resulted from the timing of State accounting transactions, where federal revenue was deposited at the end of the fiscal year while the related expenditures could not be posted until the subsequent fiscal year due to State accounting system limitations. The agency believes this represents a normal timing difference between reporting methodologies rather than a reporting deficiency. Although OMES-GMO disagrees that these timing-related variances constitute deficiencies in internal controls, OMES- GMO remains committed to strengthening reporting procedures. Beginning with FY2025 reporting, OMES-GMO has implemented enhanced reconciliation procedures requiring agencies to reconcile reported expenditures to Summary of Receipts and Disbursements (SRD) reports and PeopleSoft data prior to submission. OMES-GMO has also expanded agency guidance and annual training regarding Treasury reporting requirements, reconciliation procedures, and documentation expectations. These enhancements improve reporting consistency while recognizing that timing differences may continue to occur throughout the period of performance and will be resolved through subsequent Treasury reporting updates and final grant closeout. Anticipated Completion Date April 30, 2027, due to variances in normal business processes, reimbursement timing, accounting adjustments, and Treasury reporting requirements. Responsible Contact Person Elizabeth Base

Audit Finding Reference: 2024-002 Document Policies and Procedures Over Federal Awards Planned Corrective Action: A Uniform Guidance policy and Procedure document has been adopted. Planned Implementation Date of Corrective Action: The policy was effective 03/21/2025. Person Responsible for Corrective Action: Finance Director

Planned Corrective Action: While the Organization’s existing internal controls address management of invoices and payments, there was no written process within the organization’s internal controls that identified the required documentation, workpapers, review, and approval for federal grant reimbursements. Planned Implementation Date of Corrective Action: October 1, 2025 Name of Contact Person: Melinda Lequin, Executive Finance Director

Reporting Requirements for Federally Funded Projects – U.S. Department of Agriculture Community Facilities Loans and Grants, (Assistance Listing #10.766) Name of the Contact Person Responsible for the Corrective Action Plan: Willis Lott, Director of Finance. Corrective Action Plan: We concur. We will continue to review and improve policies and procedures in an effort to eliminate error and identify deficiencies from both operational and financial perspectives. Anticipated Completion Date: August 31, 2025

Management will: Establish grant drawdown submission deadlines, Implement automated compliance calendar reminders and list of important dates for grant period, and Annual Uniform Guidance compliance training.

Management will improve internal processes and controls to include the following: Monthly review of program expenditures for overall grant period, Quarterly reconciliation of voided checks against program drawdown invoices, and Annual Uniform Guidance compliance training.

Finding Number 2024-010 Corrective Action Plan Cash Management — AL 15.875 (U.S. Department of the Interior) • Develop, approve and issue a dedicated written cash management procedure specifically addressing the time elapsing between the receipt of infrastructure project funds and their disbursement, setting out the disbursement process and target timeframes consistent with Article IV, Section 5(b)(ii) of the Fiscal Procedures Agreement. • Maintain documentation of the date of receipt and the date of disbursement for each drawdown, so that compliance with the procedure and the minimization of elapsed time can be evidenced and monitored. • Institute periodic monitoring and reporting of elapsed time between receipt and disbursement, with exceptions escalated for management action. • Train Treasury staff and the authorized signatories in the wire-out approval process on the new procedure and the applicable FPA requirement. • Pursue resolution of the questioned costs of $1,643,137 through the audit resolution process with DOI/OIA. Management’s position is that the condition is an internal control deficiency and that questioned costs of $0 are warranted under the definition in 2 CFR § 200.1, including paragraph (3)(i), as the FPA prescribes no day-count standard, all disbursements were made within the month of receipt through the required approval process, and the payments were eligible, fully supported and reasonable. Anticipated Completion Date 9/30/2027 Responsible Person (Contact Details) Ms. Julyn Lawrence Email: julyn.lawrence@gov.fm Ms. Senny Phillip Assistant Secretary, Investment Email: senny.phillip@gov.fm

Type of Finding: Material Weakness in Internal Controls over Compliance- Cash Management Recommendation: We recommend that management ensure that all invoices are reviewed and approved before submission. Explanation of Disagreement with Audit Finding: There is no disagreement with the audit finding. Action taken in response to finding: Management has implemented a policy which requires each drawdown to be reviewed and to be based only on expenses incurred for the period, prohibiting the use of a straight-line calculation to draw down funds. Invoices are also approved by the CFO or CEO prior to submission. Name of the contact person responsible for corrective action: Regan Kelly, CEO of Net Treatment Services, Inc. dba: NET Community Care (215) 451-7000 Planned completion date for corrective action plan: December 31, 2026.