Corrective Action Plans

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

Condition: For a sample of tenants, a recertification was not completed properly, resulting in an incorrect calculation of housing assistance payments to be received. Planned Corrective Action: The Commission acknowledges the incorrect subsidy calculations and has issued refunds to the tenants in the amount of underpayment of subsidy. The Commission has also adjusted future funding requests for the overpayment of subsidy. Contact person responsible for corrective action: Steve Raiche Anticipated Completion Date: 6/30/2024

Criteria: 2CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Health System’s final expenditure listing identified as eligible and claimed under the Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution program were not reviewed and approved by a separate individual outside of the preparer. In addition, the Health System’s special report submitted to the Department of Health and Human Services for Period 4 was not reviewed and approved by a separate individual outside of the preparer. Responsible Individual: Ashley Woodward, Chief Financial Officer Corrective Action Plan: Management is aware of this control deficiency. Management is reviewing its system of internal control over compliance and plans to implement a control process which includes a secondary review and approval of the summarized final expenditure listing used to claim the allowable costs under the federal program and a secondary review and approval of required reports to be submitted to the federal agency. Anticipated Completion Date: June 30, 2024

We will review processes uon termination to ensure all necessary documentation is maintained.

2023-006: Eligibility Federal Program Title: Student Financial Assistance Cluster Assistance Listing Number: Various Type of Finding: Material Weakness Other Matters Recommendation: ISU should evaluate its procedures around disbursement of loans and ensure that notifications of disbursements are sent and contain all of the required elements outline in the FSA handbook. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: To meet requirements outlined in 34 CFR 668.165, ISU includes information in a student’s award notification email and in their MyISU portal of pertinent Direct Loan information including their “Award Payment Schedule” and what steps to take to accept, decline or modify their award offers. Additionally, in July 2023, ISU implemented an automated email notification in our daily job scheduler, AppWorx, that is sent on each date of disbursement to student Direct Loan borrowers and parent borrowers of Direct Parent PLUS (added Feb 2024) notifying them of the disbursement and reminding them what they need to do to revise or cancel the loan disbursement. Name(s) of the contact person(s) responsible for corrective action: James Martin, Director of Financial Aid Planned completion date for corrective action plan: Implemented in December 2023.

U.S. Department of Transportation 2023-004 Formula Grants for Rural Areas – Assistance Listing No. 20.509 Recommendation: We recommend the Organization properly document Sam.gov searches. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The Organization will take the steps necessary to properly document that they have searched Sam.gov. Names of the contact persons responsible for corrective action: Rich Pavek, Executive Director, and Kris Burkey, Finance Manager Planned completion date for corrective action plan: December 31, 2024

FINDING 2023-002 Finding Subject: Child Nutrition Cluster - Eligibility, Special Tests and Provisions - Verification of Free and Reduced Price Applications (NSLP) Summary of Finding: Eligibility The School Corporation had not properly designed or implemented a system of internal controls, which would include segregation of duties, that would prevent or detect and correct noncompliance relating to the eligibility determination of a child receiving meals. There was no oversight or review to ensure the eligibility determination was correct. Special Tests and Provisions - Verification of Free and Reduced Price Applications (NSLP) The Account Specialist performed the verification of free and reduced price applications. There was no documentation that an oversight, review, or approval process, or other compensating control, had been established to ensure the proper number of applications were verified for accuracy. Contact Person Responsible for Corrective Action: Josh Sinclair, Food Service Director and Allison Vanover, Corporation Treasurer. Contact Phone Number and Email Address: 812-246-3375 jsinclair@scsc.school avanover@scsc.school Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: We will use the proposed USDA form that has two signatures required. Mr. Sinclair will ensure that all signatures are collected for proof of verification. Mr. Sinclair and Ms. Susan Westfall will be a second check on the eligibility determination. One will do paper applications and the other will do online applications. Then, they will check each other for accuracy. Anticipated Completion Date: March 2024

Auditor Description of Condition and Effect. At the beginning of the Fall 2022 semester, a student was approaching their 600% lifetime Pell limit. When a student is between 500% and 600%, the College is supposed to perform a manual calculation so that the Pell award comes close to the maximum limit but does not exceed it. However, due to mistakenly being marked as full-time instead of three-quarters-time, the calculation resulted in a payment of $3,761 instead of $2,821. As a result of this condition, the College exceeded the Pell Lifetime Eligibility and overpaid a student with $940 in excess funds. It is our understanding that on September 15, 2023, the College was repaid by the student affected by the overpayment. Auditor Recommendation. We recommend that the College implement a secondary review process of not only the calculation, but for the determination of information that is used in the calculation as well. Corrective Action. The College has performed the necessary steps to correct the error and will amend the calculation process to ensure that a second individual is reviewing the work performed. Responsible Person. Maryann Decaire, Director of Financial Aid. Anticipated Completion Date. June 30, 2024.