Corrective Action Plans

Special Tests and Provisions California Governor’s Office of Emergency Services On December 10, 2025, Cal OES implemented communication protocol improvements by reemphasizing correct threshold applicability prior to payment during team meetings. In addition, by August 31, 2026, Cal OES will revise its Project Threshold standard operating procedure to include a review control that verifies the applicability of project thresholds, specifically the Large Project threshold, based on the appropriate timing criteria. Cal OES will also provide training to all grants processing and support staff on the revised procedure, including how to correctly identify and enter Large Project Thresholds, verify disaster data against approved sources, and apply the appropriate thresholds for specific declaration dates. Refresher training will be provided as needed thereafter. Furthermore, guidance on Large Project Thresholds will be incorporated into the onboarding process for all new staff. Estimated Implementation Date: August 2026 Contact: - Heidi Palchik, Chief, Recovery Financial Administration Branch, lnteragency Recovery Coordination Section

Activities Allowed and Unallowed California Department of Health Care Services DHCS reinstated county performance standards effective June 1, 2024, through Medi-Cal Eligibility Division Letter (MEDIL 24-12) and issued All County Welfare Directors Letter (ACWDL) 24-17 on November 25, 2024. ACWDL notified counties DHCS would leverage data to monitor application processing times. The data will be used to select counties for focused reviews targeting application processing times and procedures to ensure counties are performing eligibility determinations timely and accurately. DHCS has implemented multiple monitoring activities to address the recommendation and strengthen oversight of county processing of Medi-Cal applications. In May 2024, DHCS issued Medi-Cal Eligibility Division Letter (MEDIL) 24-12, ending the temporary hold harmless provisions and resumed standard county performance accountability. Subsequently, DHCS issued ACWDL 24-17, which established the Department's transition to using system-generated eligibility data, rather than county self-certification, to monitor application timeliness. Under this approach, DHCS evaluates county performance using statewide eligibility data, publishes application timeliness performance through statewide dashboards, and uses the data to identify counties for focused reviews. Focused reviews evaluate both the timeliness and accuracy of county eligibility determinations. Counties that do not meet established performance expectations are subject to corrective actions consistent with the Welfare and Institutions Code (WIC) section 14154 performance monitoring framework, including the application of statutory performance corrective action plans (CAPS), and financial penalties where applicable. Collectively, these actions establish an ongoing oversight process that enables DHCS to monitor county compliance with Medi-Cal application timeliness requirements, identify performance issues, require counties to implement corrective actions to address any deficiencies identified through focused reviews, and promote continued improvement in the timely and accurate processing of Medi-Cal applications. In 2025, DHCS issued MEDIL I 25-19, Reinstatement of the Aid Code Clean-Up Effort, which reinstated the Department's statewide process for identifying beneficiaries assigned to obsolete pre-Affordable Care Act (ACA) aid codes, transitional aid codes, or other records that may require reevaluation of eligibility. As part of this effort, DHCS provides counties with standardized reports on a bi-monthly basis to assist in identifying records that require review and action. Counties are required to review records, and either transition beneficiaries to the appropriate Medi-Cal aid code or discontinue eligibility, as applicable. Through the reinstated Aid Code Clean-Up process, DHCS performs ongoing statewide monitoring of aid code usage, identifies obsolete or inappropriate aid codes, and requires counties to take the appropriate action to ensure these beneficiaries are enrolled under the correct Medi-Cal aid category. Estimated Implementation Date: Fully Implemented Contact - Sarah Crow, Medi-Cal Eligibility Division, Division Chief - Harold Higgins, Medi-Cal Eligibility Division, Branch Chief - Amy Halim, Medi-Cal Eligibility Division, Section Chief

Washington County Ambulance District agrees with the reported finding. The underlying cause was a clerical error that was determined after reimbursement had been requested. Upon identifying the issue, additional acceptable expenses were substituted for this clerical error. Additional review will be completed on each required submission. This will be overseen by Amber Coleman, Chief Administrative Officer, with a target date of completion of December 31, 2026.

FINDING No. 2025-001: Recommendation: The Project’s management should redeposit the funds into the Residual Receitps bank account as soon as possible, to bring the account to the correct balance. Action Taken: The Project’s management will redeposit the funds into the replacement reserve account in 2026.

Finding 2025-005 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Public Housing Capital Fund Program Federal Assistance Listing Numbers: 14.872 Noncompliance - C. Cash Management Non Compliance Material to the Financial Statements: No Significant deficiency in Internal Control over Compliance for Cash Management Criteria: In accordance with 2 CFR 200.305, payment methods for federal awards must minimize the time elapsing between the transfer of federal funds and the disbursement of those funds by the recipient. Federal funds drawn under the Public Housing Capital Fund Program should be limited to amounts needed to meet the Authority’s immediate cash requirements for allowable program expenditures. Accordingly, the Authority should implement procedures to ensure grant funds are not drawn in advance of actual or imminent eligible expenditures. Condition: The Authority drew down federal funds in advance of immediate cash needs for allowable program expenditures. As of year end, a portion of the funds drawn remained unexpended and was reported as unearned revenue in the financial statements. This indicates that federal funds were received prior to the incurrence of eligible expenditures. Context: During review of the financial statements, the Authority was noted to have unexpended federal funds on hand at year end that had been drawn prior to the disbursement of allowable program costs. Specifically, amounts recorded as unearned revenue represented federal funds received in advance of immediate cash needs. This condition was identified through review of drawdown activity, general ledger balances, and year end financial reporting records. Known Questioned Costs: $134,883. Cause: The Authority did not have adequate internal controls in place to monitor the timing of grant drawdowns in relation to actual program cash needs and allowable expenditures. As a result, federal funds were requested and received prior to the incurrence of eligible costs under the Public Housing Capital Fund Program. Effect: The Authority was not in compliance with federal cash management requirements governing the timing of federal fund drawdowns. As a result, federal funds were held in advance of immediate cash needs, increasing the risk of improper cash management and noncompliance with Uniform Guidance and HUD requirements. Recommendation: We recommend the Authority strengthen its internal controls over cash management to ensure federal funds are drawn only for immediate cash needs related to allowable program expenditures. Management should implement monitoring and review controls over grant drawdown activity, including periodic reconciliation of drawdowns to incurred expenditures, to ensure compliance with 2 CFR 200.305 and HUD requirements. Authority's Response: The Authority accepts the recommendation of the auditor. The Authority will increase oversight in the Public Housing Capital Fund Program to ensure that established internal control policies are being followed on a timely basis. Ralph Staley, CFO is responsible for ensuring proper internal controls are in place to prevent significant deficiencies and material weaknesses from occurring and is expected to be completed by December 31, 2026.

Name of auditee: St. Mark’s Terrace Dundee Housing Development Fund Corporation TIN: 014-EE011 Name of Audit Firm: EFPR Group, CPAs, PLLC Period covered by audit: December 31, 2025 CAP prepared by: Jaimi Shoemaker Executive Director Current Finding on the Schedule of Findings and Questioned Costs and Recommendations (1) Finding 2025-001 (a) Comments on the finding and recommendation: Management agrees with the finding. Management also agrees with the recommendation. Please see below for action taken. (b) Action taken: Management deposited the delinquent amount of $2,053 to the residual receipts account on May 13, 2026.

Bang on a Can, Inc. will adopt written policies, procedures and standards of conduct as required by 2 CFR 200, Subparts D and E.

Finding 2025-002 – Personal Expenses Charged To The Project Recommendation: Management should strengthen expense and invoice review and approval procedures to ensure that all costs charged to the Project are reasonable, necessary, and directly related to Project operations, in accordance with the HUD Regulatory Agreement. Expense reimbursements should require detailed supporting documentation clearly demonstrating a valid Project purpose. A formal certification should be implemented as part of the approval process to attest that expenses are not personal in nature and have been approved. Internal reviews of Project expenses should be performed to identify and promptly correct any ineligible charges, including reimbursement to the Project where necessary. View of Responsible Officials and Planned Corrective Action: The individuals involved in the issues identified during the audit are no longer associated with the Project. Specifically, the former resident property manager is no longer employed by the Corporation and the composition of the Board has changed since the period under review. Management believes the identified issues resulted from a breakdown in adherence to existing approval, oversight and monitoring controls, including collusion among individuals responsible for reviewing and approving expenditures. The Project’s established policies and procedures were not properly followed. With the turnover in key personnel and Board leadership, management expects improved compliance with existing controls and oversight responsibilities. Management and the Board will continue to monitor Project expenses and ensure that expenditures are reviewed and approved in accordance with Project requirements and fiduciary responsibilities. Management response: Management agrees with the recommendation. Action Taken: The individuals involved in the issues identified during the audit are no longer associated with the Project. Specifically, the former resident property manager is no longer employed by the Corporation, and the composition of the Board has changed since the period under review. Management believes the identified issues resulted from a breakdown in adherence to existing approval, oversight, and monitoring controls, including collusion among individuals responsible for reviewing and approving expenditures. The Project's established policies and procedures were not properly followed. with the turnover in key personnel and Board Leadership, management expects improved compliance with existing controls and oversight responsibilities. Management and the Board will continue to monitor Project expenses and ensure that expenditures are reviewed and approved in accordance with Project requirements and fiduciary responsibilities.

1. Employee overseeing the deposits and disbursements has been removed from the position. 2. Write a cash management policy and procedures for receipt and disbursement of funds as well as a monitoring process for receipts (federal funds, grants) that need to be disbursed in a timely manner for Board approval.

Federal Award Finding 2025-004 - Material Weakness, Material Noncompliance - Special Tests and Provisions, Cash Receipts Finding: The Organization maintained cash balances in excess of federally insured limits in financial institutions that did not meet HUD's minimum GNMA rating requirements. Recommendation: The Organization should transfer excess cash balances to financial institutions that meet HUD's GNMA rating requirements or otherwise structure its cash holdings to ensure compliance with federal insurance limits and HUD custodial requirements. Action Taken: Nevins moved to this financial institution with the first HUD loan in 2015. This is a local bank that actively supports Nevin's mission in the community. Given Nevins’ current financial struggles, the balance in the bank seldom exceeds the $250,000 threshold. In addition, the receiver established its own account with East West Bank and was in the process of fully transitioning the operating account to East West Bank at the end of the fiscal year. Responsible Person: Paul Valentine, Receiver Target Completion Date: September 30, 2026 Status: Not started

Federal Award Finding 2025-003 - Material Weakness, Material Noncompliance - Special Tests and Provisions, Mortgage Reserve Fund, Equipment Replacement Reserve Fund, and Special Escrows Finding: During the audit period, Henry C. Nevins Home, Inc. did not make all required deposits into the reserve for replacement fund in accordance with the terms of the applicable HUD Regulatory Agreement. The required monthly reserve deposits were either not made or were made in amounts less than those required. Recommendation: We recommend that Henry C. Nevins Home, Inc., in coordination with the court-appointed receiver and HUD, establish procedures to ensure that reserve for replacement deposits are made timely and in accordance with the HUD Regulatory Agreement, or that appropriate waivers or modifications are obtained from HUD where compliance is not currently feasible. Action Taken: Management acknowledges the audit finding related to the failure to make required deposits into the reserve for replacement fund in accordance with the HUD Regulatory Agreement. As disclosed in the notes to the financial statements, during the audit period the Organization was subject to a court-appointed receivership effective September 12, 2025 and is in default under its HUD-insured mortgages. As part of the receivership, control over substantially all cash management and financial decision-making activities was assumed by the court-appointed receiver. Management believes that the conditions giving rise to this finding are directly related to liquidity constraints. Given the complexities of the receivership and regulatory environment, a specific timeline for remediation is not able to be determined. As a result of the loan default, the mortgage was assigned to the U.S. Department of Housing and Urban Development. Since the appointment of the Receiver, responsibility for cash management, financial oversight, and debt service planning has transitioned to the Receiver. The Receiver and the Organization are actively evaluating available options to address the loan default which includes marketing the Organization for a sale. Interim corrective actions include enhanced cashflow monitoring, prioritization of expenses required to continue operations, and ongoing communication with HUD regarding the sale process. Management believes that these actions will address the conditions identified and result in the satisfaction of the HUD loan. Responsible Person: Paul Valentine, Receiver Target Completion Date: September 30, 2026 Status: In process

Federal Award Finding 2025-002 - Material Weakness, Material Noncompliance - Special Tests and Provisions, Mortgage Status and Reserve for Replacements Finding: During the fiscal year, the Organization experienced ongoing financial distress and declining liquidity, which adversely affected its ability to meet financial obligations as they became due. As a result, mortgage payments, including required principal, interest, mortgage insurance premiums, and escrow deposits, were not made in accordance with the loan and regulatory agreements. As of December 31, 2025, delinquent amounts totaled approximately $978 thousand. Recommendation: The Receiver and the Organization should work with HUD to develop and implement a formal workout or resolution plan, including enhanced cash-flow monitoring and debt service planning, to address the loan default and restore compliance with HUD debt service requirements. Action Taken: Management acknowledges the finding related to the failure to make required debt service payments under the HUD Section 232 and Section 241(a) insured mortgage loan agreements. The Organization experienced significant financial distress and constrained liquidity during the fiscal year, which limited its ability to remit required principal, interest, mortgage insurance premium, and escrow payments as they became due. As a result of the loan default, the mortgage was assigned to the U.S. Department of Housing and Urban Development. With the appointment of a Receiver over the Organization, responsibility for cash management, financial oversight, and debt service planning has transitioned to the Receiver. The Receiver is marketing the facility towards a sale in order to satisfy the outstanding loan balance with HUD. Interim corrective actions include enhanced cash-flow monitoring, prioritization of operational suppliers, and ongoing communication with HUD regarding the project's financial condition and sale status. Management believes that these actions will support progress towards stabilization and marketability of the Organization. Responsible Person: Paul Valentine, Receiver Target Completion Date: September 30, 2026 Status: In process

Management has provided a template, which was reviewed and approved by the CFO in April 2026, to the AP Clerk without any roundings of the allocation percentages. Management will review the calculations between January 1 and April 2026 that were used for allocations and will correct any allocations as necessary. Management will ensure the review of expenses include all calculations supporting the expense amounts. All these actions are effective January 1, 2026, and will be managed by the Chief Financial Officer.

1. Explanation of Disagreement with Audit Finding: There is no disagreement with the audit finding. 2. Actions Planned in Response to Finding: Administration will add additional internal controls where the benefit exceeds the cost. 3. Official Responsible for Ensuring CAP: Michael Marshall, Board Secretary/Treasurer, is the official responsible for ensuring corrective action of the deficiency. 4. Planned Completion Date for CAP: The planned completion date for the CAP is June 30, 2026. 5. Plan to Monitor Completion of CAP: The School Board will be monitoring this CAP.

To satisfy this audit finding, EOHHS requested a systems solution to process Eleanor Slater Hospital (ESH) claims which would automate a recipient’s TPL, Medicare, and MCO financial obligations before Medicaid is billed. EOHHS, BHDDH, and Gainwell Technologies have been working on said system modification project (PJ0630 – Other Insurance Edits for Eleanor Slater Hospital Claims) and the Business Design Document was reviewed with all parties on 6/22/2026. Anticipated Completion Date: SFY 2027 Q1 Contact Person: Hector Rivera, Interdepartmental Project Manager, Executive Office of Health and Human Services hector.l.rivera@ohhs.ri.gov

2025-066a: In order to address repeat income deficiencies from SWICA, Medicaid added The Work Number (TWN) as a new data source in August 2025. Since then, RI Bridges has been modified to first verify earned income against TWN. With this enhancement, Medicaid has seen an improvement in how earned income is verified during the post-eligibility verification (PEV) and annual renewal processes. Medicaid has determined the individuals flagged as being enrolled under the expansion pathway beyond their 65th birthday are the result of exceptions to the mass update eligibility process. Medicaid is working with our system vendor to develop a solution that will bypass this exception and terminate expansion eligibility for those turning 65 years old. RI Bridges appropriately identified the individual in question as requiring verification of citizenship status. However, as noted in the expansion age-out response, the mass update eligibility process exceptioned out, leaving the verification as unresolved and requiring manual review. Medicaid is working with our system vendor to develop a solution that will bypass this exception and terminate eligibility. Effective December 2025, the RI Bridges system receives quarterly matches from the SSA Death Master File (DMF). The DMF is automatically sent to the State as part of the quarterly PARIS data matching process. The State has deployed temporary system measures to process the file and automatically terminate Medicaid eligibility for individuals flagged as deceased on the DMF. As per section 71104 of the Working Families Tax Cut (WFTC) legislation, signed by the President on 7/4/25, the State will be deploying a long-term system enhancement to, “at least a quarterly basis, check the DMF to identify if enrolled individuals are deceased. If an individual is identified as deceased on the DMF, then the state must treat this information as factual, disenroll the individual, and discontinue any payments for items or services furnished after the death of the individual.” This enhancement is scheduled for the March 2027 release. In July 2024, federal partners operating the PARIS interstate match informed the State of a hold on PARIS interstate matching files. PARIS lifted the hold in October 2024. In November 2024, the State identified several defects in the PARIS results and suppressed requests for verification. A temporary system enhancement was logged to address the deficiencies and ensure the process was only requesting residency verification from individuals believed to be receiving Medicaid in another State. Long-term enhancements to the PARIS interstate match process are scheduled for late 2027. 2025-066b: Medicaid will continue to work with the Department of Human Services and HealthSource RI to improve reconciliation and quality assurance monitoring of eligibility and operational processes. Including, but not limited to automated quality control checks on batch processes, manual eligibility reviews of quarterly/annual activities, creating specialized reports, improving task logic, and identifying areas of repeat non-compliance to ensure appropriate controls are in place. 2025-066c: Upon notification from the systems team, Medicaid Finance will return any identified ineligible costs to the federal grantor. Anticipated Completion Dates: 2025-066a: Q4 2026 (exception scenarios) and Q4 2027 (PARIS) 2025-066b: Q4 2026 2025-066c: Ongoing Contact Persons: Anthony Salvo, Implementation Director of Policy and Programs, Executive Office of Health and Human Services anthony.salvo@ohhs.ri.gov Dezeree Hodish, Associate Director (Financial Management), Executive Office of Health and Human Services dezeree.hodish@ohhs.ri.gov

Medicaid deployed a system enhancement to automatically run eligibility on CHIP individuals for whom TPL information was received from MMIS. This enhancement went live in May 2026. This enhancement will improve the accuracy of eligibility determinations for the Medicaid and CHIP populations. In July 2024, federal partners operating the PARIS interstate match informed the State of a hold on PARIS interstate matching files. PARIS lifted the hold in October 2024. In November 2024, the State identified several defects in the PARIS results and suppressed requests for verification. A temporary system enhancement was logged to address the deficiencies and ensure the process was only requesting residency verification from individuals believed to be receiving Medicaid in another State. Long-term enhancements to the PARIS interstate match process are scheduled for late 2027. Anticipated Completion Date: Q4 2027 Contact Person: Anthony Salvo, Implementation Director of Policy and Programs, Executive Office of Health and Human Services Anthony.Salvo@ohhs.ri.gov

RIDOH agrees with the finding and recommendations. 2025-044a: RIDOH will examine and document internal processes for requesting federal drawdowns and will create and implement revised policies and procedures to align with both federal requirements and Workday requirements for documentation of expenditures. 2025-044b: RIDOH will review and reconcile ELC and Immunization grant awards reporting excess cash drawdowns as of 6/30/2025 and will make adjustments as appropriate to ensure accurate grant award tracking. Anticipated Completion Dates: 2025-044a: June 30, 2027 2025-044b: October 31, 2026 Contact Persons: Alisha Collella, Chief Financial Office, Department of Health alisha.colella@health.ri.gov Sarah Parker, Assistant Director of Health (Budget & Finance), Department of Health sarah.parker@health.ri.gov Carla Lundquist, Deputy CFO / Federal Grants Manager, Department of Health carla.lundquist@health.ri.gov Julie DeMelo, Assistant Director of Health (Budget & Finance), Department of Health julie.demelo@health.ri.gov

Name of Contact Person: Michael Gaddy, Executive Director. Corrective Action: We will implement proper internal control procedures for the Public Housing Capital Fund. Management will establish procedures to obtain proper documentation to support all Public Housing Capital Fund expenses. Proposed Completion Date: Immediately.

Telluride Regional Airport Authority (“TRAA”) respectfully submits the following corrective action plan for the year ended December 31, 2025. Reference Number: 2025-001 Finding: TRAA’s 2025 Single Audit brought forth finding(s) which required a corrective action letter or Plan. The following item related to the Airport’s federal grant reimbursements: - Program 20.106 revenues were underreported by $1,092,801 in 2025. This underreporting stems from expenditures being incurred in 2025 but the corresponding reimbursement request, and revenue recognition, was not recorded until 2026, partially attributed to delays in submitting reimbursement requests. Corrective Action: TRAA agrees that the finding is correct. Moving forward, management will review grant expenditures at year-end to verify that the related revenues have been accrued, and management will work to file reimbursement requests for outstanding grants on a more timely basis. Personnel Responsible for Corrective Action: Linda Soucie, Business Manager Anticipated Completion Date: December 31, 2026 for fiscal year 2026

Views of Responsible Officials: The District will implement formal internal control procedures requiring review and documented approval of all SNP Claim for Reimbursement Summary reports prior to submission in PEARS. The following procedures will be implemented: 1. The Director of Food Services will prepare the monthly SNP Claim for Reimbursement Summary report and compile all supporting meal count documentation. 2. Prior to submission, the Administrative Assistant to the Director of Food Services or another designated individual independent of the preparation process will: a. Review the claim for mathematical accuracy; b. Verify meal counts against supporting documentation; c. Confirm claims are submitted within required timelines; and 3. Evidence of the review and approval will be documented through: a. Signature or electronic approval on the reimbursement summary report; and b. Retention of supporting documentation in accordance with federal and state record retention requirements. 4. A written standard operating procedure (SOP) outlining these review and approval responsibilities will be developed and communicated to applicable personnel. The Business Manager will periodically monitor compliance with the procedure to ensure controls remain effective.

Corrective Action: The City will implement formal review and approval process for reimbursement requests within grant management policy; and require documentation (signatures/dates) to evidence compliance. Responsible Individual(s): Michael Elizalde, Grants & Strategic Initiatives Director; Vidal Roman, Finance Director. Timeline: In Progress. Estimated September 2026.

2025-001 Internal Controls over Allowable Cost – Disaster Assistance Grants Point of Contact: Rachael Wilkinson, Director, APOHSEP Management’s response and corrective action plans are as follows: 1. Management acknowledges the recommendation and has taken steps to enhance oversight of the Federal Emergency Management Agency (FEMA) reimbursement requests, including those prepared by third-party consultants. Ascension Parish Government is implementing a formalized review process by the Ascension Parish Office of Homeland Security and Emergency Preparedness (APOHSEP) prior to submission to ensure that all expenditures are accurate, properly supported, and classified in accordance with FEMA requirements. 2. This process will include reconciling reimbursement requests with underlying payroll records, equipment logs, and other supporting documentation, as applicable. Management will continue to monitor FEMA submissions to ensure compliance with applicable federal guidelines and strengthen documentation of review procedures. 3. Additionally, Ascension Parish Government will amend the project worksheet to address the identified errors

Department of Homeland Security - Federal Emergency Management Agency (FEMA) Staffing for Adequate Fire and Emergency Response (SAFER) - CFDA No.97.083 Recommendation: The City should provide training for the grant administrator and/or include an additional review by individual that has been fully trained on the compliance requirements of the grant. The internal control process should include a formal way to document the review and approval of Fire Safety salary costs charged to the grant to provide evidence that internal controls are effectively designed and implemented and functioning in a timely manner throughout the year. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action planned and taken in response to finding: The City has authorized a full-time grants specialist position within the Finance Department to oversee the administration of grants separate from the programming department. The City will strengthen internal controls over grant compliance by implementing formal policies and procedures for allowable costs, documentation, and review. All grant expenditures will be reviewed and approved by Finance prior to submission, with supporting documentation maintained for eligibility determinations. Name(s) of the contact person(s) responsible for corrective action: Rebecca Holden Planned completion date for corrective action plan: 6/30/2026

Corrective Action Plan: The NCHA has implemented enhanced financial management procedures to ensure the proper segregation of Public Housing and Housing Choice Voucher program funds and prevent the use of one program’s resources to support another program’s expenditures without appropriate authorization, documentation, and accounting treatment. Interprogram transactions are now recorded through established due to/due from accounts and reconciled monthly to ensure accurate fund accountability. Financial policies and procedures have been updated to reinforce program-specific allowable uses of funds, and Finance staff have received training on HUD financial management requirements, fund segregation, and proper accounting practices. Ongoing monthly financial reviews by management will provide continued oversight and ensure compliance with HUD requirements. 1. Program Fund Segregation and Accounting Controls The NCHA has revised its accounting procedures to ensure that all program revenues and expenditures are recorded within the appropriate program fund and cost center. Public Housing Operating Funds will only be utilized for eligible Public Housing activities, and HCV program costs will be supported through HCV Administrative Fees, HCV reserves, or other allowable funding sources. Any transactions identified as requiring temporary interprogram support will be recorded through appropriate due to/due from accounts and will not be treated as program expenditures. Interprogram balances will be tracked separately from operating activity and monitored for timely repayment or resolution. 2. Review and Correction of Historical Transactions Finance staff has completed a review of interprogram transactions to identify instances where costs were charged to the incorrect program. Necessary accounting adjustments have been processed to properly allocate expenditure to the appropriate funding source. Going forward, all program cost allocations will be reviewed to confirm that expenses are:  Reasonable and allowable under applicable HUD requirements;  Charged of the appropriate program;  Supported by adequate documentation; and  Consistent with approved cost allocation methodologies. 3. Updated Financial Policies and Procedures The Authority has updated its financial procedures to reinforce:  Program-specific expenditure requirements;  Prohibited uses of Public Housing funds for HCV activities;  Proper recording of interprogram receivables and payables;  Required approval and documentation for interprogram transactions; and  Monthly reconciliation requirements. The updated procedures establish clear responsibilities for Finance staff, program managers, and supervisory personnel involved in financial review and approval processes. 4. Staff Training and Awareness Finance and program staff have received training regarding:  HUD program fund restrictions;  Public Housing Operating Fund eligible uses;  HCV Administrative Fee limitations;  Proper accounting treatment of interprogram activity; and  Documentation requirements under federal financial management standards. Additional training will be provided as needed to reinforce compliance and prevent recurrence. 5. Ongoing Monitoring and Quality Control The Finance Director will conduct monthly financial reviews to verify:  Public Housing and HCV funds remain properly segregated;  Due to/due from balances are accurately recorded and reconciled;  Program expenditures are charged to the appropriate funding source; and  Corrective actions remain effective. Management will review monthly financial reports, including program-level income statements, balance sheets, and interprogram activity reports, to identify and address potential compliance issues in a timely manner. As part of the corrective action, the NCHA executed an Agreement with BDO to provide financial management training, technical assistance, and workflow support related to HUD program accounting requirements, fund segregation, and proper recording of interprogram activity. BDO assisted Finance staff with strengthening accounting processes, including the development and implementation of standardized Yardi workflows to ensure program-specific coding, proper cost allocation, approval routing, and accurate financial reporting. Responsible Official: CFO, Sr. Staff Accountant with oversight by Executive Director Expected Completion Date: Implemented July 31, 2026; ongoing monitoring and reconciliation