Corrective Action Plans

Views of responsible officials: Before the approval of budget and the contract petition, the Chief Financial Officer will verify if the vendors are excluded as an authorized Federal contractor. The Company will establish a formal procedure to ensure that all vendors for federal funds are verified against the excluded list at least once a year. This verification process will ensure compliance with federal regulations and avoid engaging with vendors who may be suspended or debarred. Additionally, this procedure will be recommended to be included in the review process for quotes or bidding requirements, further enhancing the Company’s ability to comply with federal regulations and maintain responsible vendor relationships.

Management will enforce existing internal control procedures and train staff to maintain appropriate documentation.

The South Carolina Department of Employment and Workforce (SCDEW) immediately recognized the increased fraud risk presented by the federal pandemic programs. In an effort to deter this obvious fraud threat, SCDEW initially informed every applicant for federal pandemic benefits that they might be required to provide proof of their employment or self-employment at a future time. The USDOL, however, ordered SCDEW to remove this notification because, in the words of one USDOL representative, such a warning might deter a claimant from applying for federal pandemic benefits. USDOL subsequently issued guidance prohibiting states from requiring proof of employment or self-employment as an eligibility requirement to receive federal pandemic benefits. Therefore, all a fraudster had to do to receive federal benefits was simply tell a state they were unemployed as a result of the COVID-19 pandemic. SCDEW was prohibited from requiring that fraudster to prove that they were even employed, let alone that they were unemployed because of the pandemic. Many of the items identified as paid fraudulent claims were caused by SCDEW’s compliance with the USDOL guidelines. SCDEW complied with this guidance, even though it disagreed with USDOL’s highly technical parsing of federal law, and SCDEW advocated for Congress to amend the law to clearly establish commonsense fraud protections. While awaiting Congressional action, SCDEW implemented numerous fraud detection and prevention tools and strategies to minimize the potential fraud exacerbated by lax federal requirements. Unfortunately, Congress did not amend the law until late December 2020. As a result, eligibility determinations made by SCDEW prior to the law change followed the federal guidance for this pandemic funding; however, to meet federal and state expectations regarding the quick payment of federal pandemic benefits, the federal policies and procedures SCDEW was forced to adopt were not adequate to completely prevent fraudulent claims. SCDEW continues to review, monitor, and enhance eligibility processes and procedures to prevent and detect fraudulent claims. We also updated our internal controls to help mitigate future fraudulent claims. The COVID pandemic created unprecedented challenges for every state workforce agency due to the combination of historic claim volume, the availability of a staggering amount of federal money, and new programs with lax eligibility and verification requirements that had to be implemented quickly, despite often changing federal guidance. These factors created a perfect storm for sophisticated fraudsters to exploit. In response, SCDEW took numerous aggressive steps. In mid-2020, SCDEW required applicants to provide copies of their driver’s license or passport to prove their identity before receiving benefits. SCDEW also implemented identity verification questions through Lexis Nexis that every claimant had to pass before processing a claim. This was further enhanced in March 2021, when South Carolina was one of the first states to implement digital identity verification through ID.me. SCDEW also implemented reCAPTCHA to prevent against bot attacks, implemented new data sharing agreements, and increased the number of staff dedicated to investigating fraudulent claim activity to over fifty at the peak of the pandemic programs. SCDEW continuously reviews its fraud detection and prevention activities to stay ahead of emerging fraud schemes. Since the height of the pandemic, SCDEW has increased its data crossmatching, partnered with the State Law Enforcement Division to have a financial fraud investigator dedicated to unemployment insurance fraud, and made numerous enhancements to its computer systems to combat fraud and preserve the integrity of the unemployment insurance system. Per USDOL data, the agency had the twelfth lowest improper payment rate out of fifty-three programs during the year ending September 30, 2024. For more comprehensive explanation and response, please see August 26, 2024, letter attached from Paul Famolari, Assistant Executive Director of Unemployment Insurance. The Agency’s contact person responsible for the corrective action plan is Jacquelyn Carlen, CFO. The completion date of the corrective action plan was June 20, 2021, and is ongoing.

The Northeast Iowa Workforce Development Area acknowledges the finding. Since the period under review, a new Title I service provider has been implemented, and multiple corrective measures have been established to strengthen eligibility determination and documentation. Eligibility checklists and standardized enrollment packets are now required for each program. In addition, the new service provider has instituted a quality assurance process, with two directors conducting case file reviews across the local area. The NEIWDB has hired a compliance specialist to provide oversight, including ongoing, quarterly, and annual monitoring of eligibility and documentation. Title I staff utilize IowaWORKS reports and alerts to support compliance, and regular monthly technical assistance sessions, statewide trainings, and structured onboarding were provided to the new service provider. These measures were implemented beginning July 1, 2024 and are ongoing. The compliance specialist will report monitoring results to the NEIWDB to ensure accountability and corrective follow-up where needed. The Northeast Iowa Local Area believe these actions fully address the issue and will prevent recurrence in future program years.

Finding No.: 2022-045 AL Program: 97.039 - Hazard Mitigation Grant Program Area: Allowable Costs/Cost Principles Questioned Costs: $99,924 Contact Person(s): Patrick Guerrero, Governor’s Authorized Rep., PAO Corrective Action Plan: The Hazard Mitigation Grant Program (HMGP) agrees with this finding. During the audit submission process, HMGP provided the support documents for the journal entries and reversals associated with the $99,923.27 to the auditor, as requested. However, it was only upon receiving this audit finding # 2022-049, that the discrepancy of a duplicate audit drawdown was called into question. HMGP’s ledger for this project as well as the Munis drawdown history does not indicate a remaining balance of $99,923.73 and the project related to this finding has already been closed out. To address this audit finding that HMGP received this last week on September 17th, HMGP reached out to the Department of Finance to provide related documents for the drawdowns. Based on the documents provided by DOF, the questioned cost was not a direct result of the duplicate drawdown but as a result of the reverse journal entries made by Tyler Munis staff in an effort to correct the duplicate drawdown. HMGP accurately completed all required steps to process and provided the necessary justification to process a total of $99,923.73 for professional services and submitted it to DOF. Based on the supporting documents, the $99,923.73 was comprised of: • $53,451.01- under Request for Payment Application #11, letter reference # GAR22-HM-005 received by DOF on 10/18/2021 and requested to be charged to M142352.62060. • $46,472.72- under Request for Payment Application #12, letter reference # GAR22-HM-031 received by DOF on 11/05/2021 and requested to be charged to M142352.62060. Both HMGP payment application requests show the project string was meant to be charged to 62060 which stands for Professional Services and was submitted to DOF for processing. Since the new Munis financial system portal was launch in the CNMI a month prior, HMGP personnel were not able to enter transactions directly, unlike the current process. However, when the transaction was processed on Munis, it was entered in by a Tyler Munis representative, as identified by the staff initials SMD, who was assigned to assist DOF employees with data input during the transition period and, according to the Munis transaction history, accidentally entered the debit for the $99,923.27 under the Construction project string instead of Professional Services on 12/2/2021. On 12/13/2021, SMD credited the $99,923.27 back to Construction and debited $99,923.27 to Professional Services with Journal entry # 2125. The Munis transaction history also shows various entries and reversals made under the project account that serve to correct the same journal error. HMGP personnel would not be able to review the transactions entered prior to posting, and based on the transaction logs, even after the transactions were posted, HMGP would see that those involved in processing the transactions corrected their errors. Additionally, the supporting documents associated with the drawdowns on Munis display a bank statement with a lumpsum total of various project accounts. Furthermore, most of the journal entries during the time in question either contained the same supporting documents or indicated “access denied” when selected by HMGP personnel with Munis access. The document provided to HMGP on 9/24/2025 indicated the final two transactions related to this expense was entered by Tyler Munis staff on August of 2022. In an effort to reverse the duplicate drawdowns that occurred in Professional Services, SMD reversed the $99,923.27 from professional services labeled as "REV JE 2125 DONE IN ERROR". Journal Entry (JE) 2125 refers to the debit they initially made on 12/13/2021. This credit effectively canceled out and corrected one of the two drawdowns that occurred within the Professional Services Project String. However, on the same day, SMD made a second journal entry reversal under the Construction project string with an identical PA journal comment ""REV JE 2125 DONE IN ERROR."" It is unclear as to why this transaction occurred given that original error under construction was made and corrected on December 2021. Since this incorrect journal entry was made as a debit to construction and the correct journal entry was made as a credit to professional services, the net draw would have been $0. Since $0 worth of funds were paid out and no check was cut as a result, this additional debit would not have been conspicuous to HMGP or the DOF staff. HMGP is prepared to provide the additional documentation upon request. Additionally, acknowledging that the second debit to construction in August of 2022 for $99,923.73 was recorded and was not corrected for this project, HMGP will work with DOF to correct the journal entry and return the funds to FEMA. To address the finding, a significant action step already taken is the transition that occurred in 2024 for agencies to initiate their own drawdowns. This drawdown process ensures HMGP’s direct oversight of all expenditures moving forward to reduce the risk of future duplications. HMGP created an internal drawdown tracker upon DOF’s transition to agency-initiated drawdown requests for 2024 expenses to present. HMGP will work with DOF to correct the journal entry on Munis in relation to the questioned cost and process the return of funds to FEMA. HMGP will create a tracker for all requested transactions made to DOF, such as reversals or corrections if needed as that function cannot be completed on Munis by HMGP. HMGP will review the tracker on a bi-weekly basis to ensure that all MUNIS journal entries and transfers related to HMGP to ensure expenditures are completed accurately and on a timely basis to avoid future misclassifications or duplications. HMGP will continue to ensure that all payments are correctly coded and submitted into Munis with the appropriate documentation and supporting details. HMGP will update the financial management portion of the HMGP standard operating procedures to reflect these action items. Proposed Completion Date: September 30, 2026

Finding No.: 2022-041 AL Program: 93.778 - Medical Assistance Program Area: Special Tests and Provisions - Provider Eligibility (Screening and Enrollment) Questioned Costs: $3,640,189 Contact Person(s): Geroge J. Cruz, Medicaid Director Corrective Action Plan: The CNMI Medicaid Office respectfully disagrees with the finding. While the office did perform OIG exclusion list validation, screenshots were not captured for each individual check. It is important to note that the OIG Exclusion List portal’s search function is limited to on-screen viewing and does not provide a built-in option to print or export search results. Additionally, the CMS access process for exclusion checks involves a rigorous background clearance, and only one personnel of three total successfully gained access. The CNMI Medicaid Office acknowledges that historically, limited personnel capacity has hindered full compliance with this requirement. However, efforts are currently underway to streamline and strengthen the exclusion verification process. The office is actively developing a fully functional Program Integrity Division that will be responsible for conducting and documenting OIG exclusion checks in a consistent and compliant manner moving forward. Proposed Completion Date: January 1, 2027

Finding No.: 2022-038 AL Program: 93.778 - Medical Assistance Program Area: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Questioned Costs: $27,816,686 Contact Person(s): Geroge J. Cruz, Medicaid Director Corrective Action Plan: Condition 1: The CNMI Medicaid Office respectfully disagrees with this finding. Due to internal scheduling constraints and the compressed timeline required to complete the FY22 audit, the requested documents were not submitted by the specified deadline, resulting in this finding. However, the office maintains all relevant supporting documentation and is prepared to provide it upon request from the Grantor. Proposed Completion Date: Ongoing Condition 2: The CNMI Medicaid Office respectfully disagrees with this finding. Due to internal scheduling constraints and the compressed timeline required to complete the FY22 audit, the requested documents were not submitted by the specified deadline, resulting in this finding. However, the office maintains all relevant supporting documentation and is prepared to provide it upon request from the Grantor. Proposed Completion Date: Ongoing Condition 3: CNMI Medicaid Office respectfully disagrees with this finding. The agency currently does not have a Medicaid Management Information System (MMIS) in place to collect and accurately report comprehensive Benefits Paid data. All data processing is done manually, and information is maintained using Excel spreadsheets, which limits the ability to generate complete and reliable reports. Additionally, the "Benefits Paid" data provided to the auditor does not include services covered under the Certified Public Expenditures (CPE) payments made to CHCC. Therefore, these records should not be used as the sole basis for evaluating program eligibility, total expenditures, or compliance with eligibility requirements. However, the CNMI Medicaid Office maintains all relevant supporting documentation and is prepared to provide it upon request from the Grantor. Proposed Completion Date: Ongoing

Finding No.: 2022-037 AL Program: 93.767 - Children’s Health Insurance Program Area: Special Tests and Provisions - Provider Eligibility (Screening and Enrollment) Questioned Costs: $7,932,110 Contact Person(s): Geroge J. Cruz, Medicaid Director Corrective Action Plan: CNMI Medicaid Office respectfully disagrees with the finding. While the office did perform OIG exclusion list validation, screenshots were not captured for each individual check. It is important to note that the OIG Exclusion List portal’s search function is limited to on-screen viewing and does not provide a built-in option to print or export search results. Additionally, the CMS access process for exclusion checks involves a rigorous background clearance, and only one personnel of three total successfully gained access. CNMI Medicaid Office acknowledges that historically, limited personnel capacity has hindered full compliance with this requirement. However, efforts are currently underway to streamline and strengthen the exclusion verification process. The office is actively developing a fully functional Program Integrity Division that will be responsible for conducting and documenting OIG exclusion checks in a consistent and compliant manner moving forward. Proposed Completion Date: Ongoing

Finding No.: 2022-034 AL Program: 93.767 - Children’s Health Insurance Program Area: Activities Allowed or Unallowed and Allowable Costs/Costs Principles Questioned Costs: $1,182,511 Contact Person(s): Geroge J. Cruz, Medicaid Director Corrective Action Plan: Condition 1: The CNMI Medicaid Office respectfully disagrees with this finding. Due to internal scheduling constraints and the compressed timeline required to complete the FY22 audit, the requested documents were not submitted by the specified deadline, resulting in this finding. However, the office maintains all relevant supporting documentation and is prepared to provide it upon request from the Grantor. Proposed Completion Date: Ongoing Condition 2: CNMI Medicaid Office cannot confirm to agree or disagree with the findings stated, as the information references case numbers without sufficient supporting detail. The office does not operate a Medicaid Management Information System (MMIS) and therefore cannot automatically retrieve data to link case numbers with the total benefits paid or questioned costs. Additionally, two of the three case numbers provided are associated with multiple individuals. Even if the case numbers were accurate and beneficiary names included, the office would still need to identify the provider(s) associated with the payments in question. Claims data is maintained manually in Excel spreadsheets, consolidated across beneficiaries, and processed for payment through the MUNIS system using internally generated invoice numbers. These invoice numbers are not linked to specific beneficiaries. Therefore, to properly evaluate the findings, the office would require not only the case number, but also the beneficiary’s full name and the corresponding MUNIS invoice number. The office maintains all relevant supporting documentation and is prepared to provide it upon request from the Grantor. Proposed Completion Date: Ongoing Condition 3: The CNMI Medicaid Office respectfully disagrees with this finding. Due to internal scheduling constraints and the compressed timeline required to complete the FY22 audit, the requested documents were not submitted by the specified deadline, resulting in this finding. However, the office maintains all relevant supporting documentation and is prepared to provide it upon request from the Grantor. Proposed Completion Date: Ongoing

Finding No.: 2022-033 AL Program: 93.489/93.575/93.596 - CCDF Cluster Area: Special Tests and Provisions – Health and Safety Requirements Questioned Costs: $1,757,352 Contact Person(s): Roselle Teregeyo, CCDF Co-Administrator/Accountant Corrective Action Plan: Condition 1: CCDF respectfully disagrees with this finding. In the middle of the Fiscal year, the CCDF Program transitioned to have the Quality Rating and Improvement System or QRIS perform the announced and unannounced visits. To allow the complete transition of the CCDF Certification and monitoring system, as independent from the Child Care Licensing Program, CCDF extended all expiration dates of CCDF Providers for an additional two months. This extension was given to all CCDF providers renewing from April 2022 to December 31, 2022. With the transition, CCDF allowed for providers to meet provider requirements in a year and were only subjected to an announced visit. Any non-compliance was noted, but supported to compliance through coaching. Effective October 1, 2022, all CCDF Providers are now subjected to announced and unannounced visits. Proposed Completion Date: Completed Condition 2: CCDF respectfully disagrees with this finding. Based on our records, all providers met the annual training hours. Proposed Completion Date: Ongoing

Finding No.: 2022-032 AL Program: 93.489/93.575/93.596 – CCDF Cluster Area: Eligibility Questioned Costs: $43,100 Contact Person(s): Roselle Teregeyo, CCDF Co-Administrator/Accountant Corrective Action Plan: Condition 1: For Case ID: 2827C, 2528C, 2936A, 2528B, 3062D: CCDF agrees with these findings. To address these findings, effective October 2025, CCDF will not approve applicant/s Certificate of Confirmation without a current and valid work permit. As of January 2025, CCDF Waitlist applications are no longer initially processed by one Eligibility Worker, waitlist applications must be assessed by two eligibility workers to ensure requirements and documents are met. For final approval CCDF waitlist applications are again cross checked by the Eligibility Supervisor to ensure all requirements and documentation are met. CCDF Eligibility staff will assess client files and if needed, will request for current and valid work permits. Proposed Completion Date: December 31, 2025 Condition 2: CCDF agrees with this finding. To address these findings, effective October 2025, CCDF will not approve applicant/s Certificate of Confirmation without a current and valid work permit. As of January 2025, CCDF Waitlist applications are no longer initially processed by one Eligibility Worker, waitlist applications must be assessed by two eligibility workers to ensure requirements and documents are met. For final approval CCDF waitlist applications are again cross checked by the Eligibility Supervisor to ensure all requirements and documentation are met. CCDF Eligibility staff will assess client files and if needed, will request for current and valid work permits. Proposed Completion Date: December 31, 2025 Condition 3: CCDF agrees with this finding. For Case ID 3324B: Total overpayment to provider was $300.00. CCDF will recoup the amount from the provider no later than December 2025. CCDF determined that the overpayment to provider is $300.00. CCDF will recoup $150.00 each month from the provider beginning November 2025 and the whole amount will be recouped by December 2025. As of August 2025, CCDF Provider payments are cross checked by the CCDF Accounting section. Additionally, effective October 1, 2025, CCDF Data Specialist will cross check provider payments to ensure base payment rates are applicable to each child based on the child’s age. Proposed Completion Date: December 31, 2025

Finding No.: 2022-023 AL Program: 21.023 - Emergency Rental Assistance Program Area: Eligibility Questioned Costs: $331,985 Contact Person(s): Epiphanio Cabrera, Jr., Grants Administrator, OGM-SC Corrective Action Plan: The Office of Grant Management (OGM) respectfully disagrees with this finding. The delay in document submission was attributable to internal scheduling constraints combined with the compressed timeline required to complete the FY2022 Single Audit. While the requested documentation was not provided by the auditor’s specified deadline, OGM maintains all relevant supporting records in accordance with federal grant retention requirements and remains prepared to furnish them upon request from the Grantor. Although the documentation was submitted several days beyond the deadline, the auditors informed OGM that reviewing the late submission would cause additional delays to the overall audit process. OGM disputes the questioned cost amount of $331,985, as complete and accurate records exist to substantiate the eligibility determinations of the CCERA clients in question. Given that the program concluded more than two years ago, additional time was necessary to retrieve and compile archived files. Accordingly, OGM asserts that these costs are allowable, allocable, and fully supported, and recommends that the auditors reconsider the finding in light of the shortened audit review window and the program’s recordkeeping context. Proposed Completion Date: Ongoing

Finding No.: 2022-020 AL Program: 17.225 - Unemployment Insurance Area: Eligibility Questioned Costs: $80,773 Contact Person(s): Zachary Taitano, PUA Program Manager, DOL Corrective Action Plan: Condition 1: The CNMI agrees that the expenditure listing from the Financial System is significantly lower than the listing generated from the HireMarianas Portal. This discrepancy is due to the fact that the expenditure listing reflects only disbursed payments, whereas the HireMarianas Portal listing includes transactions that were removed, cancelled, or rejected by the claimant’s financial institution. Additionally, the HireMarianas listing includes payments that were cancelled and subsequently reissued through the portal, which may result in what appear to be duplicate entries. Proposed Completion Date: Completed Condition 2: The CNMI partially agrees with this finding. While it is acknowledged that 8 of the 11 identified users’ SAVE verification results were uploaded onto the HireMarianas Portal late, all claimants were of Qualified Alien status in accordance with the definition provided through the Immigration and Nationality Act (INA). Moreover, all SAVE responses are now on the respective applicants’ supporting documents tab on the HireMarianas Portal. Proposed Completion Date: Ongoing

Finding No.: 2022-012 AL Programs: 10.542 - Pandemic EBT Food Benefits (P-EBT) Area: Eligibility Questioned Costs: $58,494 Contact Person(s): Margaret Aldan, NAP Administrator Corrective Action Plan: Condition 1 & 2: CNMI NAP respectfully disagrees. Audit finding states that documentation supporting eligibility determinations were not provided. Finding further states that CNMI NAP lacks monitoring control over the listing of validated eligibility roster data that were not uploaded into MAVEN eligibility system due to data entry capacity limitations (sic) were not being maintained; and Distributed coupons were not reconciled to the recorded expenditures for redeemed coupons. The resulting effect being that CNMI NAP is in noncompliance with the applicable eligibility requirements and questioned costs for condition 1. CNMI NAP was informed that this finding had been cleared so we are perplexed as to the re-emergence of this audit finding. CNMI NAP contends that: 1. Eligibility for P-EBT benefits is not determined by CNMI NAP. P-EBT eligibility was determined by identifying children who qualified for free or reduced-price school meals and then correlating that with a reduction of in-person schooling due to COVID-19. Children in households receiving SNAP and young children, under age six, were also eligible, provided their schools or childcare facilities closed or reduced hours for at least five consecutive days due to the pandemic. This data was provided by PSS, as well as the listing of eligible children that corresponded to this data set. 2. There are no “validated eligibility roster data case files” that were not uploaded into MAVEN due to data entry capacity limitations. All rosters provided by PSS were uploaded into MAVEN as this is the only way a case file can be generated in the system. 3. CNMI NAP has reconciled all benefits issued, including the P-EBT benefits for the audit year in question. This is a mandatory, non-negotiable process. Proposed Completion Date: Ongoing

Finding No.: 2022-011 AL Program: 10.542 - Pandemic EBT Food Benefits (P-EBT) Area: Activities Allowed or Unallowed Questioned Costs: $-0- Contact Person(s): Margaret Aldan, NAP Administrator Corrective Action Plan: CNMI NAP respectfully disagrees with this finding. The April 2022 Compliance Supplement referenced by the auditor states: Special Tests and Provisions. 1. Verification of Free and Reduced-Price Applications (NSLP) Compliance Requirements: By November 15th of each school year, the LEA (or state in certain cases) must verify the current free and reduced-price eligibility of households selected from a sample of applications that it has approved for free and reduced-price meals, unless the LEA is otherwise exempt from the verification requirement. The verification sample size is based on the total number of approved applications on file on October 1st. A state agency may, with FNS approval, assume from LEAs under its jurisdiction the responsibility for performing the verifications. If the LEA performs the verification function it must be in accordance with instructions provided by the state agency. The LEA must follow up on children whose eligibility status has changed as the result of verification activities to put them in the correct category. CNMI NAP response: The 2022 Compliance Supplement states that the LEA, in this instance, PSS, is responsible for verifying the current free and reduced-price eligibility of households unless the LEA is exempt from the verification requirement. PSS is not exempt from the verification requirement and the CNMI NAP has never given instructions to PSS for data collection as it is the PSS’ responsibility to supply the data to NAP for P-EBT. NAP’s role is to distribute the benefits only. Similar to the SUN Bucks (S-EBT) program, PSS furnishes the student listing to NAP, after which NAP distributes the benefits according to the listing provided by PSS. Proposed Completion Date: Ongoing

Response/Views: The County Engineer and Assistant Engineer were declared eligible workers since they performed essential duties during the pandemic, as outlined in the January 2022 Overview of the Final Rule. These employees were discussed in various work sessions; however, they were not properly included in the resolution. Because the County was not a participant in IAC (Investing in Alabama Counties), we did not receive additional guidance. We elected not to pay 8 percent of ARPT funding ($4,027,142.00), which amounts to $322,171.36, to join. As a result, we were unable to obtain specific guidance from either the ACCA office or the Examiners' office on questions related to ARPT. We still have ARPT funds on hand. Corrective Action Planned: If our explanation does not fully satisfy this finding, the County is prepared to reimburse this expense from the General Fund to the ARPT fund account. The ARPT account still maintains a balance, and funds are available to be expended through December 31, 2026. It is important to note that the County received very limited guidance from both the ACCA office and the Examiners of Public Accounts personnel regarding this matter.

Reporting College of the Marshall Islands acknowledges the finding and agrees that both the Section II source data file of the Annual Performance Report (APR) and the required Final Performance Report could not be provided during the audit. This occurred due to inadequate internal controls and the limitations of the previous manual filing system, which led to incomplete retention and difficulty retrieving submitted reports during the audit fieldwork. To correct this, the College has upgraded and institutionalized a cloud-based filing system to ensure all source data files, APR submissions, and Final Performance Reports are properly stored, organized, and easily accessible. Internal control policies and procedures have been strengthened to require that all performance reports are submitted on time, with verified source data and confirmation of successful submission retained in the system. The TRIO Office has established a reporting calendar, supervisory review process, and digital archive protocol to ensure all APR and final reports are prepared, submitted, and properly retained. With the upgraded systems and the support of newly hired skilled staff, the College is now better equipped to meet federal reporting requirements. Staff have been trained— and will continue to be trained twice a year—on performance reporting procedures and federal reporting standards to prevent recurrence of similar issues in future audits.

Eligibility College of the Marshall Islands acknowledges the finding and agrees that several participant files lacked the required eligibility documentation, including proof of citizenship/residency, verification of academic support needed, documentation of age and grade level at initial selection, and confirmation of first-generation or low- income status. These gaps resulted from weak internal controls and the limitations of the previous manual filing system, which hindered proper tracking and retention of eligibility records during the audit fieldwork. To address these deficiencies, the College has upgraded and institutionalized a cloud-based filing system to ensure complete, organized, and easily retrievable participant eligibility documentation. Internal control policies and procedures have been strengthened to require that all eligibility documents including citizenship/residency proof, age and grade verification, academic support need assessments, and first-generation/low-income eligibility forms—are obtained, reviewed, and approved before a student is enrolled and receives any program benefits or stipends. The TRIO Office has implemented a new eligibility checklist and supervisory review process to verify completeness and compliance for every participant file. With the upgraded systems and the support of newly hired skilled staff, the College is now better positioned to maintain accurate eligibility records. Staff have been trained and will continue to be trained twice a year on federal eligibility requirements and documentation standards to prevent recurrence of similar issues in future audits.

Views of Responsible Officials and Corrective Action: To address this issue and ensure future compliance, we have implemented the following measures: • Eligibility Verification Protocols: We have developed and implemented standardized eligibility screening procedures for all HHS-funded programs. These protocols include: • Clear definitions of eligibility criteria based on program guidelines. • Required documentation (e.g., income verification, residency, age, or disability status). • A checklist to ensure all required documents are collected and reviewed. • Documentation Standards: All eligibility determinations are now documented and retained in participant files. We have adopted a secure digital system to store and manage these records, ensuring they are accessible for audit and monitoring purposes . • Staff Training: Program staff have received training on eligibility requirements and documentation standards. Training materials include examples of acceptable documentation and instructions for handling incomplete or missing information. Monitoring and Oversight • We have instituted periodic internal audits to review participant files for compliance with eligibility documentation requirements. • Supervisors are required to review and approve eligibility determinations before services are rendered. Policy Updates Our program policies have been updated to include: • Mandatory eligibility screening and documentation procedures. • Retention requirements aligned with 2 CFR § 200.334. • Procedures for handling exceptions and documenting justifications. Commitment to Compliance We are committed to ensuring that all participants in HHS-funded programs meet the required eligibility criteria and that our documentation practices fully comply with Federal regulations. We appreciate the audit team's diligence and will continue to cooperate fully to resolve this finding.

We concur with the finding. Beginning in FY25, claimants have been required to come in and correct errors on their weekly claim forms. Regarding the overpayment, the claimant has been provided with a completed overpayment waiver form covering the two weeks of paid benefits.

The Government concurs with the auditor's findings and recommendations. DHS has onboarded a Director of Program Integrity who will be responsible for establishing The Quality Control Unit, which will work with the Medical Eligibility Quality Control (MFCU) on behalf of the Medicaid Program.

The Government concurs with the auditor's findings and recommendations. DHS staff will work with PMO, hired to assist with the Public Health Emergency Unwind and establish Standard Operating Policies and Procedures (SOPPs) on certification and recertification processes and procedures. DHS is also in the process of hiring a Program Integrity Director and Medical Eligibility Quality Control (MEQC) staff, whose responsibility will be to review completed case files.

The Government concurs with the auditor's findings and recommendations. An internal audit process is in place and is being utilized. Specifically, this includes exchanging caseloads between workers and having the eligibility and subsidy determinations cross-checked by the different worker based on the federally and locally established policies.

The Government concurs with the auditor's findings and recommendations. While DHS remains in compliance with this finding from previously audited years, the untimely submission resulted in this finding. Moving forward, a shared file will be established to ensure that the requisite information for each year is readily available for audit purposes.

The Government concurs with the auditor's findings and recommendations. The DHS has implemented a checklist as an added internal control step to comply with the Federal requirements for review of provider enrollment applications by the provider relations staff.