Corrective Action Plans

Management Response/Corrective Action Plan: Before the Nutrition Director submits the claim, the Business Manager will review the claim with the Nutrition Director.

Management Response/Corrective Action Plan: Management should ensure all documentation is filed and maintained after it is received.

Management Response and Corrective Action Plan: The College runs weekly reports from the Ellucian Colleague system to identify students with CFlags and comment codes for loan limits. While reviewing the report if a student has comment codes for loan limits, the staff member running the reports will research and assign the issue to the appropriate Financial Aid Assistant Director to adjust the loan accordingly. For the student identified, the loan limit was calculated incorrectly in the Colleague system and the student was awarded a federal direct loan that exceeded their maximum total aggregate outstanding loan debt by $2,500. It is our belief this was not an issue of identifying the CFLAG, it was human error with reduction of loans. To correct the issue this student was awarded institutional aid to cover the amount loans were reduced. To confirm that no other student’s were impacted by a similar issue, a CFLAG full audit report was run for 2022. The report was reviewed to determine if there were any other students that had an aggregate loan limit issues. It was confirmed that this student was the only issue. The Office of Financial Aid will be enhancing the rules in our Colleague system to prevent disbursement if the Loan Limit CFlag has not been fully resolved. Staff will also be trained to not solely rely on Colleague’s Loan information and to seek verification of loan limits directly from NSLDS. OFA member that reviews loan limits will need to include the students NSLDS record in the students folder, confirmation of and loan amounts, and detailed description of adjustments. A monthly audit will occur by an Associate Director or the Director to confirm accruary and completeness. Scheduled Date of Completion: 4/15/2024 Contact person responsible: Katrina Bennett, Director of Financial Aid

Person(s) Responsible for Implementing the Corrective Action: Jenny Holden Senior Director, Grants and Community Development Corrective Action Planned: Management has implemented a process to identify any payment requests connected to internal personnel and escalate these requests for director approval prior to payment being issued. Anticipated Completion Date of Corrective Action: Management has implemented the corrective actions during FY 2024.

Finding 2023-001: Student Financial Assistance Cluster – Eligibility – Award Limits Name of Contact Person: Alice Herrick, Director of Fiscal Operations; Ryan French, Director of Financial Aid Corrective Action Plan Introduction: This Corrective Action Plan addresses the significant deficiency identified in the audit regarding the review of student enrollment data prior to loan approval. The deficiency resulted in one noted student receiving a federal loan disbursement above their annual eligibility limit, and two students who each received a federal loan disbursement below their annual eligibility limit. We acknowledge the issue and have implemented immediate corrective measures to rectify the situation and prevent recurrence. Root Causes Analysis: The deficiency stemmed from two main factors: a. Limitations of PowerFAIDS: The software lacks automated quality control mechanisms to prevent overawarding or overdisbursement. Additionally, the software’s database design poses a challenge due to the “one-to-many” relationship of Periods of Enrollment (POE), making automated packaging algorithms which address this deficiency impossible. b. Staff Awareness: Financial aid staff were unaware of PowerFAIDS' limitations and lacked clear guidance on necessary quality control procedures. Immediate Corrective Actions Implemented: In response to the deficiency, the following actions have been taken: a. Manual Quality Control Procedure: A manual review process has been established prior to each semester's disbursement date. This process includes verifying student enrollment data and identifying discrepancies between self-reported class levels (PF: "F-YR-SCHOOL") and official class progression (PC: "academic_class_level", PF: "POE-YR-SCHL"). b. Repackaging and Communication: Students with verified discrepancies in class levels are repackaged accordingly and updated financial aid offer letters/emails are sent to notify students of changes and request their consideration. Confirmation of Effectiveness: A thorough review of the 2023-2024 academic year data confirms that no current students have been awarded or disbursed above their annual eligibility limit, validating the effectiveness of the implemented quality control procedure. Future Mitigation Strategies: To further mitigate the risk of noncompliance and reduce manual review time, the following strategies will be implemented: a. Dynamic Custom Field in PowerFAIDS: Proposing the creation of a dynamic custom field (e.g., “PC_ACL_Progression”) that updates student class levels via API integration with PowerCampus. b. Automated Packaging Rule: Developing an automated packaging rule within PowerFAIDS based on the dynamic custom field to identify Year In School (YIS) mismatches and trigger necessary repackaging. This rule will incorporate the YIS Mismatch quality control function and algorithm, reducing the time commitment necessary for manual review. Timeline for Implementation: While a current manual process is in place, the proposed future mitigation is forthcoming. a. Manual Quality Control Procedure: This procedure was put into effect by Financial Aid staff on November 16th, 2023, and was successfully implemented prior to Spring 2024 disbursement. All current disbursements of Federal TitleIV aid have been made in accordance with U.S. Department of Education criteria. b. Future Mitigation: The proposed dynamic custom field and automated packaging rule will be developed and implemented within the next academic year to streamline the quality control process and enhance compliance measures. Conclusion: Maine Maritime Academy is committed to ensuring compliance with U.S. Department of Education regulations and providing accurate and appropriate financial aid awards to students. The corrective actions outlined in this plan address the deficiencies identified in the Uniform Guidance audit and aim to prevent similar issues in the future. We appreciate the audit findings and remain dedicated to continuous improvement in our financial aid procedures. Name of Contact Person: Alice Herrick, Director of Fiscal Operations; Ryan French, Director of Financial Aid Corrective Action Plan: The Academy will review current procedures related to awarding Unsubsidized and Subsidized loans and implement additional review procedures to ensure awards to students are appropriately within limits set by the Department of Education. Planned Completion Date: June 2024

CORRECTIVE ACTION PLAN Oversight Agency for Audit: U.S. Department of Treasury The City of Peabody, Massachusetts respectfully submits the following corrective action plan for the year ended June 30, 2023. Name and address of independent public accounting firm: Powers & Sullivan, LLC 100 Quannapowitt Parkway, Suite 101 Wakefield, MA 01880 Audit period: July 1, 2022 through June 30, 2023 The finding from the June 30, 2023, schedule of findings and questioned costs is discussed below. The finding is numbered consistently with the number assigned in the schedule. FINDINGS—FEDERAL AWARD PROGRAMS AUDITS U.S. DEPARTMENT OF EDUCATION Passed through Massachusetts Department of Elementary and Secondary Education Education Stabilization Fund Education Stabilization Fund Federal Assistance Listing No. 84.425D, 84.425U and 84.425W 2023-006: Controls for Monitoring Payroll Charged to the Grant Compliance Requirement: Allowable Costs/Cost Principles Type of Finding: Compliance and Material Weakness in Internal Control Over Compliance Criteria or Specific Requirement: Grantees must provide reasonable assurance that Federal Awards are expended only for allowable activities and that the costs of goods and services charged to Federal awards are allowable and in accordance with applicable cost principles. Condition: Payroll expenditures charged to the Education Stabilization Fund grant are required to be supported with documentation (i.e., semi-annual certifications and personnel activity reports) substantiating that the employees are eligible to be charged to the grant and that the payroll charged relates to time spent accomplishing grant objectives. The City utilizes semi-annual time and effort certification forms to document the eligibility of the employees paid out of the grant. These forms, however, were not completed for each employee charged out of the grant. Context: The City did not maintain sufficient documentation to demonstrate compliance with federal and state time and effort reporting requirements in accordance with the provisions of Title 2 U.S. Code of Federal Regulations Part 225 Cost Principals for State, Local, and Indian Tribal Governments. Effect: The City has not complied with the federal and state time and effort reporting requirements. Cause: Management has not established written guidelines and procedures outlining the time and effort reporting and documentation requirements that department heads must adhere with to ensure compliance with federal and state time and effort reporting requirements. Such guidelines and procedures should indicate under what circumstances semi-annual certifications and personnel activity reports (PARS) are required. Management also has not adopted and implemented standardized forms that include all data as required by federal and state guidelines to demonstrate compliance with these requirements. Questioned Costs: Total payroll costs charged to the grant in 2023 totaled $3,487,658, which was paid on a bi-weekly basis throughout the year. Three of the pay periods were selected for testing, which totaled $440,173 for 83 employees paid out of the grant during those pay periods. From the pay periods selected for testing, $440,173 of known questioned costs were identified. Repeat Finding: This matter was reported as a finding in the previous year as finding 2022-003. Recommendation: The City should establish written policies and procedures outlining the time and effort reporting and documentation requirements that must be adhered with to ensure compliance with federal and state time and effort reporting requirements. Management should adopt and implement standardized forms that include all data required by federal and state guidelines and provide training to ensure that program personnel understand the time and effort reporting requirements. Views of Responsible Officials and Planned Corrective Actions: The School District will immediately begin reissuing and recollecting the forms for the education stabilization grant for 2024, as well as into future periods. If the Oversight Agency has questions regarding this plan, please call Samuel Rippin, School Business Manager, at 978-536-6520. Sincerely yours, Samuel Rippin School Business Manager City of Peabody

CORRECTIVE ACTION PLAN Oversight Agency for Audit: U.S. Department of Treasury The City of Peabody, Massachusetts respectfully submits the following corrective action plan for the year ended June 30, 2023. Name and address of independent public accounting firm: Powers & Sullivan, LLC 100 Quannapowitt Parkway, Suite 101 Wakefield, MA 01880 Audit period: July 1, 2022 through June 30, 2023 The finding from the June 30, 2023, schedule of findings and questioned costs is discussed below. The finding is numbered consistently with the number assigned in the schedule. FINDINGS—FEDERAL AWARD PROGRAMS AUDITS U.S. DEPARTMENT OF EDUCATION Passed through Massachusetts Department of Elementary and Secondary Education Title I Grants to Local Educational Agencies Title I Grants to Local Educational Agencies Federal Assistance Listing No. 84.010 2023-004: Eligibility of Schools and Allocations to Schools Compliance Requirement: Eligibility Type of Finding: Compliance and Material Weakness in Internal Control Over Compliance Criteria or Specific Requirement: Grantees must determine which schools or school attendance areas are eligible to participate in the program. When determining eligibility, grantees must select a poverty measure from among one of the allowable data sources. Grantees must serve eligible schools or attendance areas in rank order according to their percentage of poverty. Grantees must also provide equitable services to eligible private school students and homeless students prior to allocating funds to the eligible public schools using similar allowable data sources. Condition: The City was required to determine which schools or school attendance areas, including private school students and homeless students, were eligible to participate in the grant program. The City was also required to ensure that eligible schools or school attendance areas were served in rank order in accordance with their percentage of poverty. The supporting documentation was not available upon request and was not provided in a timely manner. The information required to perform this testing was requested in May 2023, and was not provided until January 2024, after several repeated requests were made throughout that time. Context: The City did not provide sufficient documentation to demonstrate the compliance of its eligibility determinations or allocations to schools in a timely manner. Effect: The City has not complied with the grant requirements. Cause: Management has not established guidelines and procedures to ensure that documentation regarding eligibility determinations and allocations is retained and filed in an organized manner that is made readily available upon request. Questioned Costs: None reported. Recommendation: The City should implement internal control procedures to ensure compliance with all grant requirements including the completion and retention of all documentation regarding eligibility determinations and allocations to schools. The documentation should be filed in an organized manner and should be readily available upon request. Views of Responsible Officials and Planned Corrective Actions: The School District will implement internal control procedures to ensure that the required documentation is completed, retained and maintained in an organized manner. Management plans to implement these procedures in 2024. If the Oversight Agency has questions regarding this plan, please call Samuel Rippin, School Business Manager, at 978-536-6520. Sincerely yours, Samuel Rippin School Business Manager City of Peabody

CORRECTIVE ACTION PLAN Oversight Agency for Audit: U.S. Department of Treasury The City of Peabody, Massachusetts respectfully submits the following corrective action plan for the year ended June 30, 2023. Name and address of independent public accounting firm: Powers & Sullivan, LLC 100 Quannapowitt Parkway, Suite 101 Wakefield, MA 01880 Audit period: July 1, 2022 through June 30, 2023 The finding from the June 30, 2023, schedule of findings and questioned costs is discussed below. The finding is numbered consistently with the number assigned in the schedule. FINDINGS—FEDERAL AWARD PROGRAMS AUDITS U.S. DEPARTMENT OF EDUCATION Passed through Massachusetts Department of Elementary and Secondary Education Title I Grants to Local Educational Agencies Title I Grants to Local Educational Agencies Federal Assistance Listing No. 84.010 2023-003: Controls for Monitoring Payroll Charged to the Grant Compliance Requirement: Allowable Costs/Cost Principles Type of Finding: Compliance and Material Weakness in Internal Control Over Compliance Criteria or Specific Requirement: Grantees must provide reasonable assurance that Federal Awards are expended only for allowable activities and that the costs of goods and services charged to Federal awards are allowable and in accordance with applicable cost principles. Condition: Payroll expenditures charged to the Title I grant are required to be supported with documentation (i.e., semi-annual certifications and personnel activity reports) substantiating that the employees are eligible to be charged to the grant and that the payroll charged relates to time spent accomplishing grant objectives. The City utilizes semi-annual time and effort certification forms to document the eligibility of the employees paid out of the grant. These forms, however, were not completed for each employee charged out of the grant. Context: The City did not maintain sufficient documentation to demonstrate compliance with federal and state time and effort reporting requirements in accordance with the provisions of Title 2 U.S. Code of Federal Regulations Part 225 Cost Principals for State, Local, and Indian Tribal Governments. Effect: The City has not complied with the federal and state time and effort reporting requirements. Cause: Management has not established written guidelines and procedures outlining the time and effort reporting and documentation requirements that department heads must adhere with to ensure compliance with federal and state time and effort reporting requirements. Such guidelines and procedures should indicate under what circumstances semi-annual certifications and personnel activity reports (PARS) are required. Management also has not adopted and implemented standardized forms that include all data as required by federal and state guidelines to demonstrate compliance with these requirements. Questioned Costs: Total payroll costs charged to the grant in 2023 totaled $919,109, which was paid on a bi-weekly basis throughout the year. Three of the pay periods were selected for testing, which totaled $110,714 for 28 employees paid out of the grant during those pay periods. From the pay periods selected for testing, $110,714 of known questioned costs were identified. Repeat Finding: This matter was reported as a finding in the previous year as finding 2022-002. Recommendation: The City should establish written policies and procedures outlining the time and effort reporting and documentation requirements that must be adhered with to ensure compliance with federal and state time and effort reporting requirements. Management should adopt and implement standardized forms that include all data required by federal and state guidelines, and provide training to ensure that program personnel understand the time and effort reporting requirements. Views of Responsible Officials and Planned Corrective Actions: The School District will immediately begin reissuing and recollecting the forms for the Title I grant for 2024, as well as into future periods. If the Oversight Agency has questions regarding this plan, please call Samuel Rippin, School Business Manager, at 978-536-6520. Sincerely yours, Samuel Rippin School Business Manager City of Peabody

CORRECTIVE ACTION PLAN Oversight Agency for Audit: U.S. Department of Treasury The City of Peabody, Massachusetts respectfully submits the following corrective action plan for the year ended June 30, 2023. Name and address of independent public accounting firm: Powers & Sullivan, LLC 100 Quannapowitt Parkway, Suite 101 Wakefield, MA 01880 Audit period: July 1, 2022 through June 30, 2023 The finding from the June 30, 2023, schedule of findings and questioned costs is discussed below. The finding is numbered consistently with the number assigned in the schedule. FINDINGS—FEDERAL AWARD PROGRAMS AUDITS U.S. DEPARTMENT OF EDUCATION Passed through Massachusetts Department of Elementary and Secondary Education Special Education Cluster Special Education Grants to States Federal Assistance Listing No. 84.027 Special Education Preschool Grants Federal Assistance Listing No. 84.173 2023-002: Controls for Monitoring Payroll Charged to the Grant Compliance Requirement: Allowable Costs/Cost Principles Type of Finding: Compliance and Material Weakness in Internal Control Over Compliance Criteria or Specific Requirement: Grantees must provide reasonable assurance that Federal Awards are expended only for allowable activities and that the costs of goods and services charged to Federal awards are allowable and in accordance with applicable cost principles. Condition: Payroll expenditures charged to the Special Education Cluster grant are required to be supported with documentation (i.e., semi-annual certifications and personnel activity reports) substantiating that the employees are eligible to be charged to the grant and that the payroll charged relates to time spent accomplishing grant objectives. The City utilizes semi-annual time and effort certification forms to document the eligibility of the employees paid out of the grant. These forms, however, were not completed for each employee charged out of the grant. Context: The City did not maintain sufficient documentation to demonstrate compliance with federal and state time and effort reporting requirements in accordance with the provisions of Title 2 U.S. Code of Federal Regulations Part 225 Cost Principals for State, Local, and Indian Tribal Governments. Effect: The City has not complied with the federal and state time and effort reporting requirements. Cause: Management has not established written guidelines and procedures outlining the time and effort reporting and documentation requirements that department heads must adhere with to ensure compliance with federal and state time and effort reporting requirements. Such guidelines and procedures should indicate under what circumstances semi-annual certifications and personnel activity reports (PARS) are required. Management also has not adopted and implemented standardized forms that include all data as required by federal and state guidelines to demonstrate compliance with these requirements. Questioned Costs: Total payroll costs charged to the grant in 2023 totaled $1,794,406, which was paid on a bi-weekly basis throughout the year. Three of the pay periods were selected for testing, which totaled $156,211 for 65 employees paid out of the grant during those pay periods. From the pay periods selected for testing, $156,211 of known questioned costs were identified. Repeat Finding: This matter was reported as a finding in the previous year as finding 2022-001. Recommendation: The City should establish written policies and procedures outlining the time and effort reporting and documentation requirements that must be adhered with to ensure compliance with federal and state time and effort reporting requirements. Management should adopt and implement standardized forms that include all data required by federal and state guidelines and provide training to ensure that program personnel understand the time and effort reporting requirements. Views of Responsible Officials and Planned Corrective Actions: The School District will immediately begin reissuing and recollecting the forms for the special education grant for 2024, as well as into future periods. If the Oversight Agency has questions regarding this plan, please call Samuel Rippin, School Business Manager, at 978-536-6520. Sincerely yours, Samuel Rippin School Business Manager City of Peabody

Condition: One of forty students tested was under-awarded Pell grant funds. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action in Response to Finding: The College developed a task within Financial Aid software that will flag locked Pell awards for review. Name of the contact person responsible for corrective action: Erica Shafer, Associate Director, Financial Aid Systems & Compliance Co-Interim Director of Financial Aid, and Abby Wilson, Financial Aid Counselor. Planned completion date for corrective action plan: November 15, 2023

CORRECTIVE ACTION PLAN Oversight Agency for Audit: U.S. Department of Education The City of Methuen, Massachusetts respectfully submits the following corrective action plan for the year ended June 30, 2023. Name and address of independent public accounting firm: Powers & Sullivan, LLC 100 Quannapowitt Parkway, Suite 101 Wakefield, MA 01880 Audit period: July 1, 2022, through June 30, 2023 The finding from the June 30, 2023, schedule of findings and questioned costs is discussed below. The finding is numbered consistently with the number assigned in the schedule. FINDINGS—FEDERAL AWARD PROGRAMS AUDITS U.S. DEPARTMENT OF EDUCATION Passed through Massachusetts Department of Elementary and Secondary Education Special Education Cluster #84.027, 84.173 Title I #84.010 Education Stabilization Fund #84.425 2023-001: Controls for Monitoring Payroll Charged to the Grant Compliance Requirement: Allowable Costs/Cost Principles Type of Finding: Compliance and Internal Control Over Compliance – Other Matter Criteria or Specific Requirement: Grantees must provide reasonable assurance that Federal Awards are expended only for allowable activities and that the costs of goods and services charged to Federal awards are allowable and in accordance with applicable cost principles. Condition: Payroll expenditures charged to the grants are required to be supported with documentation (i.e., semi-annual certifications and personnel activity reports) substantiating that the employees are eligible to be charged to the grant and that the payroll charged relates to time spent accomplishing grant objectives. The City utilizes semi-annual time and effort certification forms to document the eligibility of the employees paid out of the grant. These forms, however, were not completed for each employee charged out of the grant for fiscal year 2023. Context: The City did not maintain sufficient documentation to demonstrate compliance with federal and state time and effort reporting requirements in accordance with the provisions of Title 2 U.S. Code of Federal Regulations Part 225 Cost Principals for State, Local, and Indian Tribal Governments. Effect: The City has not complied with the federal and state time and effort reporting requirements. Cause: Turnover in the grant manager role led to time and effort documentation not being completed for fiscal year 2023. Management should follow their written guidelines and procedures outlining the time and effort reporting and documentation requirements that department heads must adhere with to ensure compliance with federal and state time and effort reporting requirements. Such guidelines and procedures should indicate under what circumstances semi-annual certifications and personnel activity reports (PARS) are required. Questioned Costs: Total payroll costs charged to the grants in 2023 is as follows: Recommendation: The City should follow their written policies and procedures outlining the time and effort reporting and documentation requirements that must be adhered with to ensure compliance with federal and state time and effort reporting requirements. Management should ensure the standardized forms are approved by the individual in charge of the grant and overseen by grant management personnel. This will ensure compliance is not impacted by employee turnover in the future. Views of Responsible Officials and Planned Corrective Actions: The School District will immediately begin reissuing and recollecting the time and effort documentation for the impacted grants for 2023, as well as into future periods. If the Oversight Agency has questions regarding this plan, please call Ian Gosselin, Assistant Superintendent of Finance and Operations, at 978-722-6018. Sincerely, Ian Gosselin Assistant Superintendent of Finance and Operations City of Methuen, Massachusetts

Views of Responsible Officials and Planned Corrective Action: Due to the health concerns of the pandemic as well as unprecedented claims volume, claimants were not required to come into a local office for identity verification, the waiting week was waived for 2020, and the requirements for work search were adjusted in order to protect employees and claimants. Before the pandemic, all claimants were required to come to the local office to verify their identity. Removing these process controls resulted in several consequences as itemized below: • By waiving the waiting week, the claimant was able to receive payment the following week. For example, a fraudster could file a claim on Friday, then receive payment on Sunday, removing the typical week that an employer would respond to validate the separation from employment. • The information mailed to the employer and claimant were not received before payments were made due to the lack of waiting week. • Businesses were closed at that time and did not respond to the unemployment paperwork timely to report fraudulent claims. • Identity theft fraudsters often changed the address of the individuals for which they had filed claims in order to prevent the victims from being notified and reporting the fraud. In 2020, the work search requirement was reinstated. In 2021, all claimants had to verify their identity in-person at the local office before the claim was opened for a regular unemployment claim. The UIdentify program was utilized for identity verification for the PUA claims filed after January 1, 2021. The waiting week was reinstated in January 2021, which lengthened the time period for employers to respond before payment was issued. In addition, Internal Audit created the Fraud Investigation Unit and hired additional staff to focus on investigating the identity theft fraud claims. When the perpetrator is identified, a determination is issued and an overpayment is established in the perpetrator’s name/SSN for collection. The NASWA Integrity Data Hub (IDH) crossmatch was implemented in July 2020 as well in an effort to identify additional fraudulent claims for investigation. ADWS was the first UI program to implement 2 projects with the Department of Labor for identity verification. One is using Login.gov and the other involves the United States Postal Service where they verify the identity of claimants for using multifactor authentication and in person presentation of ID. The Login.gov pilot started in 2022 and the USPS pilot project started in 2023. 1. The Login.gov project uses the current system that Federal agencies use to verify identity and went into service in Arkansas as of March 2022. A link is given to the claimant, when they select verify ID through login.gov and go through the steps to verify their identity through the federal government system. If they are approved, we are sent an IA2 verification to the UI processing system to allow staff to match back to the claim to prove ID verification. 2. The United States Postal Service project, implements in Arkansas March 2023, offers the claimant the same link as Login.gov, but grants the additional option to verify their identity at any US Post Office in the country. A barcode is created and must be taken with a valid government-issued ID (they are given examples) along with proof of current address to the post office in person. If they are approved, we are sent an IA2 verification to the UI processing system to allow staff to match back to the claim to prove ID verification. Anticipated Completion Date: Corrective action was taken for the ALA staff recommendations. Contact Person: Name: Sheri Rooney Title: Program Administrator Agency: Division of Workforce Services Address: 2 Capitol Mall City, State, Zip: Little Rock, AR 72201 Phone Number: 501-682-3382 Email Address: Sheri.Rooney@arkansas.gov

Views of Responsible Officials and Planned Corrective Action: DHS concurs with the finding. Effective May 31, 2019, DMS established and implemented new procedures to improve the following areas of provider enrollment: maintenance of provider application documents, provider revalidation, site visits and fingerprint background requirements. The deficiency noted for the provider referenced in sample item 21 relates to non-compliance with site visit requirements pre-dating May 31, 2019 and CMS’s approval of the agency’s corrective action plan. A site visit was performed for this provider on 8/31/2023. The agency has created system controls that require site visits before a moderate or high-risk provider may enroll with Arkansas Medicaid. The provider noted in sample item 29 began the revalidation process in December of 2019 and their application was set to terminate at the end of February 2020. The provider was not terminated before beginning of the Public Health Emergency (PHE) with their revalidation date being reset to 9/5/2023 when the CMS 1135 waiver flexibilities were implemented. The provider has since timely completed the revalidation process. The provider noted in sample item 32 did not keep its certification up to date for the audit period. During the PHE, many licensing and certification agencies were not processing new requests or renewals for extended periods of time. A review of this provider’s information revealed that it is likely that they would have been able to maintain continued certification. The agency has automated its certification verification process to terminate providers if a certification lapses for any reason. Anticipated Completion Date: Complete Contact Person: Name: Elizabeth Pitman Title: Director, Division of Medical Services Agency: Department of Human Services Address: 700 Main Street City, State, Zip: Little Rock, AR 72201 Phone Number: 501-244-3944 Email Address: Elizabeth.Pitman@dhs.arkansas.gov

Views of Responsible Officials and Planned Corrective Action: DHS concurs with the finding. The agency is in the process of developing an MMIS change that will automatically update member profiles to accurately reflect incarceration dates. This will ensure capitated payments are paused and reinstated in a timely manner and that recoupments and repayments are subsequently processed. The agency is conducting an ARIES system review to determine the root cause of the incorrect eligibility determinations and will identify and implement any needed updates to the automatic renewal process. Anticipated Completion Date: 6/30/2024 Contact Person: Name: Mary Franklin Title: Director, Division of County Operations Agency: Department of Human Services Address: 700 Main Street City, State, Zip: Little Rock, AR 72201 Phone Number: 501-681-8377 Email Address: Mary.Franklin@dhs.arkansas.gov

Views of Responsible Officials and Planned Corrective Action: DHS concurs with the finding. Since June 2023, DYS has made multiple changes to improve monitoring of suspension and reinstatement of Medicaid eligibility for incarcerated juveniles. For juveniles with SSI Medicaid, the Social Security Administration (SSA) is responsible for suspending Medicaid coverage. All incarcerations for cases noted in the findings involving SSI Medicaid were reported timely to SSA by the agency. DYS closely monitors these cases and continues to send closure requests to SSA until the cases are closed out. DYS has also updated its communication processes with DCO to ensure cases are suspended and reinstated in a timely manner. All payments noted as occurring during the incarceration period were capitated payments made for the PASSE, Dental Managed Care, NET, and PCCM programs. Some audit findings highlighted payments made for members during their month of incarceration, which is acceptable for all programs. The full monthly rate is paid for Dental Managed Care, NET, and PCCM even if the member is only eligible for part of the month. The PASSE program operates on a per-diem basis and any payments made for days when the member is ineligible are recouped as part of a monthly reconciliation. The agency currently has a reconciliation process for all four programs that identifies payments made after a member’s incarceration date that should be recouped. Some payments noted in the findings will be recouped as part of a reconciliation process that has yet to run. In addition to the current reconciliation process, the agency is in the process of developing an MMIS change that will automatically update member profiles to accurately reflect incarceration dates. This will ensure capitated payments are paused and reinstated in a timely manner and that recoupments and repayments are subsequently processed. Anticipated Completion Date: 6/30/2024 Contact Person: Name: Elizabeth Pitman Title: Director, Division of Medical Services Agency: Department of Human Services Address: 700 Main Street City, State, Zip: Little Rock, AR 72201 Phone Number: 501-244-3944 Email Address: Elizabeth.Pitman@dhs.arkansas.gov

Views of Responsible Officials and Planned Corrective Action: DHS concurs, in part, and disputes, in part, the finding. Effective May 31, 2019, DMS established and implemented new procedures to improve the following areas of provider enrollment: maintenance of provider application documents, provider revalidation, site visits and fingerprint background requirements. The deficiency noted for the provider referenced in sample item 9 relates to non-compliance with site visit requirements pre-dating May 31, 2019, and CMS’s approval of the agency’s corrective action plan. Since CMS implemented 1135 waiver flexibilities during the Public Health Emergency (PHE), the provider was not terminated and was notified of the agency’s intent to revalidate their enrollment within six months of the end of the PHE. The provider successfully completed the revalidation process prior to the expiration of the 1135 waiver flexibilities. The absence of enrollment documentation noted in sample items 19 and 37 can be attributed to transitions and document storage issues that occurred within the legacy MMIS system. Since the time of enrollment for these two providers, the agency has made multiple updates to the MMIS system to capture and retain enrollment documentation. The agency has obtained the required documentation noted as missing for both sample items. The deficiency noted in sample item 33 has been resolved as the agency has verified licensure of the provider covering the audit period. Anticipated Completion Date: Complete Contact Person: Name: Elizabeth Pitman Title: Director, Division of Medical Services Agency: Department of Human Services Address: 700 Main Street City, State, Zip: Little Rock, AR 72201 Phone Number: 501-244-3944 Email Address: Elizabeth.Pitman@dhs.arkansas.gov

Views of Responsible Officials and Planned Corrective Action: DHS disputes the finding. The revalidation date for the provider noted in sample item 28 was 7/20/2022. Per CMS guidance, revalidations, site visits, and fingerprint background checks were paused during the COVID Public Health Emergency (PHE) (3/1/2020-5/11/2023) and states were given until 11/11/2023 to complete revalidations due during the PHE. As this provider’s revalidation and site visit were completed on 10/12/2023, the agency is in compliance with all provider revalidation requirements. Based on research conducted by DMS, the provider noted in sample item 36 was not enrolled until 9/16/2018. Therefore, the revalidation date for this provider is 9/16/2023 as opposed to 6/12/2023 and there would be no questioned cost for the audit period. Anticipated Completion Date: Complete Contact Person: Name: Elizabeth Pitman Title: Director, Division of Medical Services Agency: Department of Human Services Address: 700 Main Street City, State, Zip: Little Rock, AR 72201 Phone Number: 501-244-3944 Email Address: Elizabeth.Pitman@dhs.arkansas.gov

Views of Responsible Officials and Planned Corrective Action: DHS concurs with the finding. The agency is conducting an ARIES system review to determine the root cause of the incorrect eligibility determinations and will identify and implement any needed updates to the automatic renewal process. Anticipated Completion Date: 4/30/2024 Contact Person: Name: Mary Franklin Title: Director, Division of County Operations Agency: Department of Human Services Address: 700 Main Street City, State, Zip: Little Rock, AR 72201 Phone Number: 501-681-8377 Email Address: Mary.Franklin@dhs.arkansas.gov

Views of Responsible Officials and Planned Corrective Action: DHS concurs with this finding. As the Public Health Emergency has concluded, the agency has returned to normal operations which requires disenrollment of any PASSE member that has not received an independent assessment within the last 12 months. Anticipated Completion Date: Complete Contact Person: Name: Elizabeth Pitman Title: Director, Division of Medical Services Agency: Department of Human Services Address: 700 Main Street City, State, Zip: Little Rock, AR 72201 Phone Number: 501-244-3944 Email Address: Elizabeth.Pitman@dhs.arkansas.gov

Views of Responsible Officials and Planned Corrective Action: DHS concurs with the finding. ARIES system logic has been updated to consider all information recorded in the PARIS match reports when identifying cases for review. Anticipated Completion Date: Complete Contact Person: Name: Mary Franklin Title: Director, Division of County Operations Agency: Department of Human Services Address: 700 Main Street City, State, Zip: Little Rock, AR 72201 Phone Number: 501-681-8377 Email Address: Mary.Franklin@dhs.arkansas.gov

Views of Responsible Officials and Planned Corrective Action: DHS concurs with the finding. The agency has updated its internal controls procedures to require enhanced review of payments made after the death of a provider or a client and enhanced monitoring of when a client is removed from an adoptive parent’s home. The Accounts Receivable Unit in the Office of Finance has implemented systems changes that ensures all claims will generate a collections notice with the correct claims data. The noted outstanding collection notices have been sent and data entry errors have been corrected. Anticipated Completion Date: Complete Contact Person: Name: Tiffany Wright Title: Director, Division of Children and Family Services Agency: Department of Human Services Address: 700 Main Street City, State, Zip: Little Rock, AR 72201 Phone Number: 501-396-6477 Email Address: Tiffany.Wright@dhs.arkansas.gov

Views of Responsible Officials and Planned Corrective Action: DHS concurs with the finding. The agency has updated its documented controls to require confirmation that agreements are signed by all parties before processing adoption subsidy packets. Adoption staff will be trained on the updated controls. Anticipated Completion Date: 3/31/2024 Contact Person: Name: Tiffany Wright Title: Director, Division of Children and Family Services Agency: Department of Human Services Address: 700 Main Street City, State, Zip: Little Rock, AR 72201 Phone Number: 501-396-6477 Email Address: Tiffany.Wright@dhs.arkansas.gov

Views of Responsible Officials and Planned Corrective Action: Due to the health concerns of the pandemic as well as unprecedented claims volume, claimants were not required to come into a local office for identity verification, the waiting week was waived for 2020, and the requirements for work search were adjusted in order to protect employees and claimants. Before the pandemic, all claimants were required to come to the local office to verify their identity. Removing these process controls resulted in several consequences as itemized below: • By waiving the waiting week, the claimant was able to receive payment the following week. For example, a fraudster could file a claim on Friday, then receive payment on Sunday, removing the typical week that an employer would respond to validate the separation from employment. • The information mailed to the employer and claimant were not received before payments were made due to the lack of waiting week. • Businesses were closed at that time and did not respond to the unemployment paperwork timely to report fraudulent claims. • Identity theft fraudsters often changed the address of the individuals for which they had filed claims in order to prevent the victims from being notified and reporting the fraud. In 2020, the work search requirement was reinstated. In 2021, all claimants had to verify their identity in-person at the local office before the claim was opened for a regular unemployment claim. The UIdentify program was utilized for identity verification for the PUA claims filed after January 1, 2021. The waiting week was reinstated in January 2021, which lengthened the time period for employers to respond before payment was issued. In addition, Internal Audit created the Fraud Investigation Unit and hired additional staff to focus on investigating the identity theft fraud claims. When the perpetrator is identified, a determination is issued and an overpayment is established in the perpetrator’s name/SSN for collection. The NASWA Integrity Data Hub (IDH) crossmatch was implemented in July 2020 as well in an effort to identify additional fraudulent claims for investigation. ADWS was the first UI program to implement 2 projects with the Department of Labor for identity verification. One is using Login.gov and the other involves the United States Postal Service where they verify the identity of claimants for using multifactor authentication and in person presentation of ID. The Login.gov pilot started in 2022 and the USPS pilot project started in 2023. 1. The Login.gov project uses the current system that Federal agencies use to verify identity and went into service in Arkansas as of March 2022. A link is given to the claimant, when they select verify ID through login.gov and go through the steps to verify their identity through the federal government system. If they are approved, we are sent an IA2 verification to the UI processing system to allow staff to match back to the claim to prove ID verification. 2. The United States Postal Service project, implements in Arkansas March 2023, offers the claimant the same link as Login.gov, but grants the additional option to verify their identity at any US Post Office in the country. A barcode is created and must be taken with a valid government-issued ID (they are given examples) along with proof of current address to the post office in person. If they are approved, we are sent an IA2 verification to the UI processing system to allow staff to match back to the claim to prove ID verification. Anticipated Completion Date: Corrective action was taken for the controls the ALA staff recommended. Contact Person: Name: Sheri Rooney Title: Program Administrator Agency: Division of Workforce Services Address: 2 Capitol Mall City, State, Zip: Little Rock, AR 72201 Phone Number: 501-682-3382 Email Address: Sheri.Rooney@arkansas.gov

Condition and Criteria: The Authority’s purpose for existence is providing decent, safe and affordable housing to low- income persons. As such, the Authority prepares a file for each admitted family, which contains information necessary to determine eligibility for assistance and calculations of rent assistance to be paid on the family’s behalf. HUD regulations prescribe the content of these family files. These requirements consist of the following: a. As a condition of admission or continued occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility. b. For both family income examinations and reexaminations, obtain and document in the family file third party verification of: (1) reported family annual income; (2) the value of assets; (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income-based rent. c. Determine income eligibility and calculate the tenant’s rent payment in accordance with HUD regulations. d. Select tenants from the public housing waiting list in accordance with the PHA’s tenant selection policies. e. Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary. Population and Items Tested: Testing of sixty family files revealed the following deficiencies: 1. Two lacked documentation of rent reasonableness. 2. One file contained a HAP contract not signed by the owners. 3. Two files calculated an incorrect housing assistance payment. 4. One file lacked signed Form 9886 authorization for the period under review. Auditor’s Recommendation: A thorough review of tenant files should be performed for the purpose of eliminating the deficiencies. Grantee Response: We will comply with the auditor’s recommendation.

Condition: For a sample of tenants selected in conjunction with eligibility testing, the Commission did not correctly calculate family income composition, and did not retain required documentation supporting eligibility determinations. Planned Corrective Action: The Commission is implementing a plan to audit internally 100 percent of all tenant files in our Low Income Public Housing (LIPH) program. This plan involves both the use of experienced employees and an outside consultant. The plan includes updating and automating files, identifying recurring compliance issues, and expanding formal training and specific training from the consultant. In addition, an additional level of review will be put in place to assist in catching any inconsistencies. The Commission has added additional employees to the LIPH program, which include an operations manager and a staff person. These additional resources will be incorporated into our overall plan to increase our compliance controls. Contact person responsible for corrective action: Steve Raiche Anticipated Completion Date: 6/30/2024