Corrective Action Plans

2023-002 Compliance Over Reporting Name of Contact Person: Chief Financial Officer: Amber Curley Corrective Action: The Center agrees with the findings and has taken steps to ensure that all future audit reports are filed on time. This includes having brought in additional resources to include a Finance Consultant that has over 25 years of FQHC Community Health Center and audit experience/expertise. Focus area is Audit Readiness to ensure the audit is coordinated and filed on time. This will ensure that deficiencies noted in the FY 2023 audit pertaining to compliance over reporting are cleared. Proposed Completion Date: September 30, 2024

The management of Anderson Place Apartments, Inc. accepts the recommendation of Deming, Malone, Livesay & Ostroff and, accordingly, management will contact HUD to ensure that all excess residual receipts are remitted to HUD as soon as possible.

The management of Edsil’s Place Apartments, Inc. accepts the recommendation of Deming, Malone, Livesay & Ostroff and, accordingly, management will contact HUD to ensure that all excess residual receipts are remitted to HUD as soon as possible.

We have requested HUD approval to delay reimbursement of the reserves pending receipt of Budget Based Rent increase. We anticipate that this will be approved.

Finding No. 2023-001: Cash Management and Subrecipient Monitoring Controls Material Weakness Finding: Cash disbursements of federal funds intended for subrecipients of the federal program were misappropriated due to a man-in-the-middle email scheme perpetrated by a TechnoServe program manager. The intended subrecipient was paid and TechnoServe was able to recover most of the losses through the bank and insurance. Corrective Actions Taken or Planned: Responsible Official: Jeff Chrisfield, Chief Financial Officer Anticipated Completion Date: December 31, 2024 View of Responsible Individuals: Between March and September 2023, an employee serving in a trusted position as finance manager perpetrated a man-in-the-middle scheme to alter payment details relating to a sub-awardee, diverting payments worth $331,127 for personal gain. This was a sophisticated scheme involving multiple fake domain names and a methodical process to hijack and control all communications between TechnoServe and the subrecipient relating to payments. The sophistication of the scheme, coupled with the employee’s direct access to all involved parties, allowed him to evade detection by both TechnoServe and the subrecipient for an extended period. Immediately after the incident, TechnoServe verified payments will all subawardees and other major vendors to ensure receipt of funds. No additional diversions occurred. To ensure no similar scheme goes undetected, the following internal controls will be implemented: 1. Formalize subrecipient bank instruction changes: When a subaward is drafted, subrecipient bank details are recorded in the subaward agreement. In this situation, the offending employee created fake email correspondence, coupled with counterfeit bank letters, to initiate a change in bank account information for the subrecipient and evade detection within TechnoServe. To mitigate this risk, TechnoServe will require that all changes to subrecipient bank instructions be documented with a formal subaward modification, signed by authorized representatives of both TechnoServe and the subrecipient. 2.Verification of vendor data changes: TechnoServe already has in place a control over vendor records requiring internal approval for changes to key vendor data, such as bank instructions. In addition, payment offices regularly verify bank instruction changes with vendors. In this case, the controls failed because the offending employee supported fraudulent changes with counterfeit bank letters and falsified email chains such that they appeared to include the payee via a man-in-the-middle scheme. To overcome this risk, TechnoServe will ensure that change to vendor banking information is verbally verified with the vendor by the relevant financial controller. In addition, we will implement an automated process that sends email notification to vendors regarding changes to the vendor’s key data (name, address, phone, email, tax identification number, primary contact, and bank information). Notification of changes to a vendor’s on-file email address will be sent to both the old and new email addresses. 3. Automated notification statements of account: In this instance, the offending employee utilized a man-in-the-middle scheme to intercept inquiries from the subrecipient regarding missing payments, which delayed TechnoServe’s detection of the payment diversion. To mitigate this risk, TechnoServe will institute a weekly automated statement of account detailing payments transacted during the preceding period with instructions about who to contact in the event of a discrepancy. These actions, taken together, will help TechnoServe to prevent or rapidly detect similar schemes going forward.

Finding 2023-004 - Lack of Data Available to Audit Federal Compliance Requirements Applicable to the Public Housing Capital Fund Program (Material Weakness, Potential Material Noncompliance) Public Housing Program-Assistance Listing No.14.872; Grant period-fiscal year ended March 31,2023 Condition: We did not attain sufficient supporting data in order to audit the Commission's compliance with the Allowable Activities, Allowable Costs, Cash Management, Procurement and Special Tests and Provisions compliance requirements applicable to the Capital Fund Program . Contact person responsible for corrective action: Arturo Puckerin Corrective action planned: The authority hired a new financial fee accountant to review the internal controls and the state of the Authority's financials as of fiscal year 2023 forward. The authority was able to correct the HUD REAC Financial Data Schedule for the audited financials for fiscal year 2023, record the pension and other post-retirement employment benefits balances and begin work on reconstructing the capital asset register. The authority has integrated proper financial and accounting internal controls through the accounts payable, cash receipts, payroll and accounting entries during fiscal year 2024. The authority has the financial fee accountant work with accounting and program staff to ensure the financials are materially stated monthly, hud reporting is completed on a timely basis with materially stated financial and operational information and the executive staff is reviewing the appropriate financial information. The board approved the fiscal year 2025 budget which was in balance and set the course for continued improvement of financial reporting and proper internal controls over financial reporting. The Authority has reconciled the Capital fund accounting activity to the respective Capital Fund approved budgets by active program years, reconciled drawdowns and properly recorded the expenditures and drawdown by respective grant years and applicability to Asset Management Properties. Anticipated completion date: March 31, 2024

Finding 2023-001 Condition: The Town has not documented in writing its policies regarding federal awards. Corrective Action Planned: We will work with the Select Board over the next few months to have these policies approved. Anticipated Completion Date: Fiscal year 2025 Contact: Mary Daughraty, Town Administrator

Finding 2023-002- U.S. Department of Education (USDE). Title 111a1n d TRIO Programs: The Federal Title Ill Program had excess cash of $868,391 at June 30, 2023. The College also had excess cash of $85,212 in the Upward Bound Program and $226,381 in the Student Support Services Program atJune 30, 2023. Auditor's Recommendation - We recommend the College limit the funds it draws down for these programs in order to control and manage its cash better. Corrective Action - Management concurs with this finding. The College will implement o pion to repay the excess cash in the future years to eliminate the excess cash balance.

MANAGEMENT AGREES WITH THE FINDING. THE RESIDUAL RECEIPTS ACCOUNT DEFICIENCY WAS FUNDED ON SEPTEMBER 7, 2023 IN THE AMOUNT OF $21,785. MANAGEMENT WILL ENSURE THAT THE RESIDUAL RECEIPTS ACCOUNT IS PROPERLY FUNDED IN THE FUTURE.

MANAGEMENT AGREES WITH THE FINDING. THE EXCESS FUNDS WERE ACCRUED TO SUBMIT TO HUD.

Views of Responsible Officials: The Organizations concur with the auditor's assessment and are in the process of implementing a formal procedure that includes the review and approval of FFRs and programmatic reports.

Research and Development – Assistance Listing No. 43.008 Research and Development – Assistance Listing No. 93.433 Recommendation: We recommend that the University review and update current procedures to ensure subrecipient payments are paid timely. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Langston is strengthening accounts payable processes and sign-off approvals in order process appropriate reimbursements to subrecipients timely. Name(s) of the contact person(s) responsible for corrective action: Mr. Robert Dixon, Director, Grants and Contracts Fiscal Administration at Oklahoma State University and Mr. Chris Kuwitzky, Vice President for Fiscal and Administrative Affairs. Planned completion date for corrective action plan: June 2024

Corrective Action: NTU will enforce policies and procedures for cash drawdowns to ensure all drawdowns are properly supported. Additionally, an electronic filing system will be developed to maintain all drawdowns and the related backup documentation, enhancing the processing and record-keeping of drawdown documents. Person Responsible: Beverly Miller, Accounting Manager and Harshwal & Company, LLC Estimated Completion Date: July 31, 2024

Corrective Action: NTU has established a monthly cash management schedule to track and identify all grant funds, detailing the total cash received in advance from grantors and amounts due to NTU. To increase cash balances, NTU will focus on the timely collection of outstanding grants receivable. Additionally, NTU will analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is available for grants received in advance. Person Responsible: Beverly Miller, Accounting Manager Estimated Completion Date: July 31, 2024

Finding 2023– 004 CONDITION During the current audit period, the Cook County Department of Public Health (DPH) did not adequately comply with its cash management requirements in accordance with federal regulations. CORRECTIVE ACTION: The CCDPH will work with program staff to develop and implement a vendor receipt tracker, contingency plan to continue the workflow in the event a vacancy occurs; monitor to ensure the Grant AP and Procurement process follow established process for timely award ofsubrecipient contracts; provide subrecipients with documented processes for submitting invoices for reimbursement; create an internal AP document to track lead time in processing invoices. Anticipated completion of the corrective action is estimated to be December 31, 2024. The corrective action will be coordinated by the Director of Grants Accounting.

2023-03: Approval for expenditures Name of contact person: Stephen Bontekoe, Program Coordinator Corrective Action: A member of management of the Board of Directors will review and authorize all disbursements. This authorization will be evidenced by the initialing of each disbursement reviewed. Proposed completion date: The Board will implement the above procedure immediately.

2023-01: Segregation of Duties Name of contact person: Stephen Bontekoe, Program Coordinator Corrective Action: Duties and functions will be reviewed to determine where segregation needs to occur. The duties will be separated as much as possible and alternative controls will be implemented to compensate for lack of segregation. However, the risk of not segregated certain duties are not worth the additional costs. Nonfinancial employees will be trained and provide some assistance. Proposed completion date: The Board will implement the above procedure immediately.

Healthy Start has implemented a double check by the Director and the Administrator to verify that all monitor visits are done in a timely manner. An audit is done each quarter to ensure that all monitor visits are completed within the six month time frame. In fiscal year 2024 as of December 31, 2023 all monitor visits have been performed within the six month time frame.

Additional preventive internal control procedures will be implemented, including an additional level of review of the reimbursement requests prior to submission. These procedures and internal controls have been implemented as of the date of this report.

Finding 2023-003 – Cash Collateralization Criteria: Uniform Guidance 2 CFR, Part §200.305(b)(7) requires advance payments of Federal funds to be deposited and maintained in insured accounts whenever possible. Condition: During our review of the Coalition’s cash, it was noted that as of September 30, 2023, they have. not collateralized cash balances in excess of the amounts insured by the Federal Despot Insurance Corporation. Cash balances of $10,608,222 were uninsured at September 30, 2023. Unearned revenue was reported at approximately $5,389,532 which includes advance payments of Federal funds. Questioned Costs: None Cause: The Coalition has not entered into a cash collateralization agreement with their financial institution. Effect: The Coalition is not in compliance with Uniform Guidance 2 CFR, Part §200.305(b)(7) as not all cash balances received in advance from the funding agency were adequately insured or collateralized and were exposed to custodial credit risk in the event of a bank failure. Recommendation: We recommend the Coalition enter into a cash collateralization agreement with their financial institution to ensure that all amounts related to grant agreements and awards received in advance are not exposed to custodial credit risk in the event of a bank failure. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs. Responsible Officials; Dr. Donna L. Polk CEO, Carlett Gregory CFO, Anne Steinhoff Board Treasurer. Corrective Action: In response to the finding regarding the lack of collateralization for cash balances in excess of the amounts insured by the Federal Deposit Insurance Corporation (FDIC). NUIHC will get clarification from I.H.S. and our financial institution to address the best way to resolve this issue. Possible options are using the CDARS program or finding a local DIF member institution. The Coalition will take the following corrective actions: 1. Establish Cash Collateralization Agreement: o The Coalition will promptly enter into a cash collateralization agreement with our financial institution. This agreement will ensure that all cash balances, including those received in advance from federal funding agencies, are adequately insured or collateralized. 2. Review of Cash Management Policies: o We will review and update our cash management policies to ensure compliance with Uniform Guidance 2 CFR, Part §200.305(b)(7). This review will include assessing our current banking arrangements and making necessary adjustments to mitigate custodial credit risk. 3. Monitoring and Compliance: o The Coalition will implement a monitoring system to regularly review cash balances and ensure that they do not exceed insured limits without proper collateralization. This system will involve periodic checks and coordination with our financial institution to maintain compliance. 4. Training and Education: o We will provide training to our financial and accounting staff on the importance of cash collateralization and the requirements of Uniform Guidance 2 CFR, Part §200.305(b)(7). This training will ensure that all relevant personnel are aware of the new procedures and the need to maintain insured or collateralized cash balances. Timeline for Implementation: The corrective actions outlined above will be implemented within the next 30 days. The cash collateralization agreement will be established immediately, and updates to cash management policies will be completed within this period. Training sessions for relevant staff will be conducted promptly following the implementation of these changes.

The Area Coordinators will be retrained to double check their meal counting on their menus at least once before they submit their meal counts and one time after they submit their meal counts.

Finding: 2023-003 - Oversight over cash management compliance requirement. Contact Person(s): Dan Gehl, CFO (dgehl@cmhshare.org) Explanation and specific reasons for disagreement with the audit finding or that corrective action is not required (if applicable): No disagreements. Corrective action planned: In September 2023, CLR has addressed the finding that its policies and procedures over reimbursement requests for federal funds lacked proper documentation of approvals according to the Uniform Guidance for federal grants. We have added a step in the online submission process with the Substance Abuse and Mental Health Services Agency (SAMHSA) to capture a screenshot of the reimbursement form to be approved before submission. Due to the timing of the FY 2022 Single Audit completion and the ending of the CCBHC contract, we were limited in the execution of this new procedure, however it is now part of our Single Audit accounting Policies and Procedures Manual. Anticipated completion date: Completed September 2023.

Cognizant or Oversight Agency for Audit U.S. Department of Housing and Urban Development Mortgage Insurance – Hospitals Federal Assistance Listing/CFDA #14.128 Findings Relating to Federal Awards and Questioned Costs Finding 2023-004 Reporting Material Weakness in Internal Control Over Compliance and Material Noncompliance Finding Summary: The Department of Housing and Urban Development (HUD) requires a quarterly reporting of financial and statistical data. Amounts reported under “All Non‐Operating Revenue” and “Other Changes in Fund Balance” in the Organization’s third quarter report submitted to HUD were not reconciled to and did not agree with the underlying financial data. The internal financial statements do not present all of the information that is required in the HUD quarterly reports and the differing information was all put to one line on the HUD quarterly report when the differences should have been evaluated and documented. Responsible Individuals: Charles Roeder, Vice President Finance/CFO Corrective Action Plan: To ensure the accuracy of the report, the Organization approved the policy Review of Reports Filed with Federal Agencies which details that the preparer of the report will submit it to the CFO or delegated staff member different from the preparer to review and formally approve before the report is filed with the federal agency. A different staff member will document and date the review and when formal approval was received and maintain a file on the process. Anticipated Completion Date: September 30, 2024

Association will develop more detailed policies for subrecipient monitoring, including responses to and consequences for subrecipient noncompliance, as well as procedures for reconciling monthly expenditure reports and drawdown requests to supporting documentation. Policies will be reviewed and approved by the finance committee.

Finding Summary: Guild’s controls did not operate as designed, which resulted in overbilling reimbursement for services in one month during 2023. Corrective Action Plan: Each receipt from this payer will be reconciled with the general ledger in the month received. In addition, the payer is modifying their payment support to show any payer-initiated adjustments. Responsible Individuals: Keith Rachey, Chief Financial Officer Anticipated Completion Date: Completed and staff trained by September 2024