Corrective Action Plans

FINDING ? FEDERAL AWARD PROGRAMS AUDIT LEGAL SERVICES CORPORATION 2022-002 Legal Services Corporation ? CFDA No. 09.120000 Noncompliance: The last time the Board documented review and approval of financial eligibility guidelines was at the April 2019 meeting. They would have been required to review and approve them again by April 2022. Recommendation: Implement a reminder system to ensure the review and approval of financial eligibility guidelines is documented at a minimum of every three years. Responsible Person for Corrective Action: Tom Fritzsche, Executive Director Corrective Action to be Taken: PTLA faced a challenging year in 2022 with a significant change in leadership, which resulted in this deadline being missed. In particular, at the time of the Board of Directors meeting when the triennial review of our client financial eligibility policy would have occurred, PTLA's Executive Director had recently passed away, and the Board was fully engaged in the search process for a new ED. Moving forward, PTLA will develop a reminder system to ensure this review and approval occurs on a timely basis. The anticipated completion date for this corrective action is June 22, 2023. The review and approval will take place at the next board meeting, at which time a regular schedule will be established for timely review.

FINDING ? FEDERAL AWARD PROGRAMS AUDIT LEGAL SERVICES CORPORATION 2022-001 Legal Services Corporation ? CFDA No. 09.120000 Noncompliance: Out of sixty-four case files tested, three files did not contain the required retainer agreement. One file did not have a signed citizenship attestation statement documented. Neither of these cases were considered brief advice and consultation. Recommendation: We recommend that every effort be made to obtain retainer agreements and citizenship attestation early in the representation process and follow-up on those that are not returned. Responsible Person for Corrective Action: Tom Fritzsche, Executive Director Corrective Action to be Taken: Pine Tree holds biannual mandatory staff trainings on the LSC regulations, which include a review of the requirements for retainers and citizenship attestations. We have processes in place to obtain the required documents on paper or electronically. Pine Tree continues to prioritize compliance with these rules. In addition to continuing our biannual training of all staff about the regulations and how to fulfill them, we will continue to work on policies and procedures, and stay up to date on technological advances, that can help us overcome the factors that led to the occasions in which clients did not return the documents that Pine Tree provided for their review and completion. We will continue to evaluate the barriers, and systematic solutions to reduce them, that make it difficult to obtain the required paperwork from some clients, which can include the time-sensitive nature of our work, clients? inability to meet in person, the large geographic size of our service area, and some clients? significant mental health issues that limit their capacity to complete paperwork. The anticipated completion date for this corrective action is June 21, 2023 (scheduled all-staff LSC regulation training) ? the training will include reminders and training about these requirements. The other steps to work on overcoming some of the barriers will continue as ongoing action.

FINDING 2022-003- U.S. DEPARTMENT OF TREASURY - ELIGIBILITY SIGNIFICANT DEFICIENCY Federal Assistance Listing Number: 21.023- Emergency Rental Assistance Program Grant Number: Various Grant Period: Various We are implementing the following procedures to address the auditing finding 2022-003: There are no current grants for this program, or any other client assistance programs for the Northern Counties we serve. The Hillsborough / Pinellas program will train Northern County staff on the usage of their flow chart they developed listing the grants and the requirements of each grant so employees can follow which grant the prospective client is eligible in order for implementation to prevent eligibility issues in the future. We will implement Case Reviews once a program is established.

FINDING 2022-001- U.S. DEPARTMENT OF HOUSING AND DEVELOPMENT- ELIGIBILITY MATERIAL WEAKNESS Federal Assistance Listing Number: 14.239 HOME Investment Partnerships Program Grant Number: Various Grant Period: Various We are implementing the following procedures to address the auditing finding 2022-001: Prior to the recent internal audit of PH3, we were still rebounding from the effects COVID 19 had on our procedures at Pinellas Hope Apartments. We went through a period of significant staff turnover which resulted in falling behind on a procedure of reviewing files on a regular basis. We have subsequently hired new staff with Property Management experience and have reviewed and corrected all the current files. We also have restarted our procedure of Monthly peer reviewed audits of files for new move-ins.

FINDING 2022-002- U.S. DEPARTMENT OF HOUSING AND DEVELOPMENT- ELIGIBILITY SIGNIFICANT DEFICIENCY Federal Assistance Listing Number: 14.231 Emergency Solutions Grant Program Grant Number: Various Grant Period: Various We are implementing the following procedures to address the auditing finding 2022-002: The program has implemented a flow chart listing the grants and the requirements of each grant so employees can follow which grant the prospective client is eligible. Catholic Charities will continue to conduct case reviews/ supervision on the 2nd Thursday of every month, to ensure compliance to the grants of the program involved. Files are swapped with Mercy House to complete this reviews /supervision. The case managers and case aides in both Hillsborough and Pinellas counties are involved. The person in charge of the file reviews and checks income and uses the rent calculation sheet to verify if the household meets the correct AMI.

Plan - The Association has brought the eligibility concerns to the attention of the NRWA. ARWA will work with NRWA and USDA to update a list of eligible systems. Staff will be required to check for population size and/or USDA qualification status prior to claiming a contact. If a system is eligible based on other qualifying information, documentation of that will be entered into the system on the day it is recorded. The Program Manager will review contacts claimed for eligibility each week and follow up on those in question with the staff member responsible for the contact, as well as provide a summary each month to the Executive Director. Individuals Responsible - Mike Baumgartner, Steve Berry, and Derek Pierce Completion Date - Plan has been implemented as of the date of audit submission.

Finding: 2022-001 ALN and Title: 10.565 ? Commodity Supplemental Food Program Cluster Name: Total Food Distribution Cluster Federal Agency: U.S. Department of Agriculture Passthrough Entity: State of Nevada Department of Agriculture Name of Contact Person: Sue Saunders, Director of Finance Corrective Action Plan: Management has implemented a filing system to ensure the collection of current clients as well as a recertification process. CSFP/SNW created a monthly, site specific, year and alphabetized list filing system to aid in the assurance of the certification & recertification. Certification and recertification are occurring at CSFP/SNW distribution sites. In addition, we have a tracking system in our TJOP Salesforce Software System. Currently, we are working towards establishing a digital certification application process. Proposed Completion Date: September 30, 2023

Oversight Agency for Audit, Senior Citizens Housing Development Corporation of Boston, Inc. respectfully submits the following corrective action plan for the year ended December 31, 2022. Name and address of independent public accounting firm: Bellows Associates, P.A., 5401 N University Drive, Suite 201, Coral Springs, Florida 33067 Audit period: January 1, 2022 through December 31, 2022 The findings are from the December 31, 2022 schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. SECTION III - FINDINGS AND QUESTIONED COSTS ? MAJOR FEDERAL AWARD PROGRAMS AUDIT FINDING No. 2022-001: Section 202 Supportive Housing for the Elderly, ALN 14.157 Recommendation: Management should verify eligibility in a timely manner and perform background checks prior to tenant acceptance. Action Taken: This was an oversight from a former community manager. Management has provided current staff with additional training on HUD guidelines and regulations.

Northeast Indiana Works (NEINW) will continue to the use the established file review process. NEINW will be conducting a system wide WIOA file review. This review will be done in stages and will be completed by the end of May 2023. NEINW will deliver training to all staff to reacquaint them with the virtual service delivery model, including, but not limited, to the application process. This training will be conducted during the weekly Thursday morning training session on January 5, 2023. A follow up session will be held on January 12, 2023 to address any questions and to train staff who may have been absent during the January 5th session. Person(s) Responsible: NEINW President and CEO, CFO, Director of WorkOne Services and Director of Quality Initiatives Timing for Implementation: Staff training will be conducted in January 2023. System wide file review will be completed by the end of May 2023.

CORRECTIVE ACTION PLAN Name and Number of the Project: See below Audit Firm: M Group, LLP Audit Period: The period from December 9, 2021 (Inception) through December 31, 2022 Gretna Village, LP VHDA (Project No. 02-1709-HF/SP and 02-1710-HCD) $ Unknown Waters at James Crossing, LP (FHA/Contract No. VA36-L000-130) $ Unknown Waters at Augusta, LP (FHA/Contract No. SC16-M000-060) $ Unknown Compliance Review COMMENTS ON FINDINGS AND RECOMMENDATIONS We concur with the findings and recommendations of our auditors regarding our noncompliance as cited in the accompanying Schedule of Findings and Questioned Costs. ACTIONS TAKEN OR TO BE TAKEN FINDING #2022-003: Section 8 Housing Assistance Payments Program. CFDA: 14.195 CORRECTIVE ACTION TO BE COMPLETED: The Project's will review and monitor tenant eligibility and documentation procedures to ensure compliance. We have prepared the corrective action plan as required by the standards applicable to financial statements contained in Government Auditing Standards and by the audit requirements of Title 2 US. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principals, and Audit Requirements for Federal Awards. Any questions regarding the above corrective action plan should be directed to Mr. Michael Nguyen, President of Atlantic Housing Management, Tnc.

Temporary Assistance for Needy Families (TANF) ? Assistance Listing No. 93.558 Recommendation: We recommend the County implement a process to ensure that errors identified in the TANF quality control review process are addressed in a timely manner. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: This is in isolated incident in our QA process. We have built a system with ticklers, and we missed this one. We will implement a secondary review by our QA supervisor to make sure all QA issues have been resolved in a timely manner. Name of the contact person responsible for corrective action: John McGraw ? Program Manager of Professional Standards Planned completion date for corrective action plan: July 1, 2024

Corrective Action Plan 1. The corrective measures pertaining to DVHA?s enhanced oversight of Gainwell?s contractual obligation to DVHA to provide licensure validation service and documentation of active licensure will include established benchmarks for the overall improvement of the service, expansion of automated search services, progress reports and overall reduction of manual processes. By 5/1/2023 Gainwell will provide the DVHA Oversight & Monitoring Unit with Progress Reports that will be shared at the Fiscal Agent meeting and with DVHA Leadership to track progress and/or report roadblocks and escalate issues of any actual or potential failures to timely perform provider revalidations. Gainwell will use the Provider Management Module (PMM) and other services available to validate license of a provider. For those providers that cannot be validated through PMM or other services, Gainwell will send a letter notice to those providers. Letter notice must be sent no later than 30 days prior to a license expiration date. Gainwell shall submit to DVHA on a weekly basis a list of providers who have been notified that they are due for re-validation and have not responded within 14 days of license expiration date. Gainwell will use PMM and other services available to validate license of a provider. For those providers that cannot be validated through PMM or other services, Gainwell will send a letter notice to those providers. Letter notice must be sent no later than 30 days prior to a license expiring. The written detailed procedure for license updates will be finalized by 04/01/23 between the State and Gainwell and will include the following: a. Update the look forward period in the license screening service to 45 days. As a result, PMM will be updated automatically when the license screening service is available to locate an updated license. This configuration update will be in place by 04/01/23. For those licenses that the screening service is not able to locate an updated license, Gainwell will review and manually check for an updated license. If a new license is found, Gainwell will update accordingly. Gainwell will explore using Lexis Nexis as an additional service for manual review of license information and provide an update of potential solution by 03/17/23. If determined the Lexis Nexis solution is not viable, Gainwell will propose additional solution options by 05/01/23. b. Any provider whose license was not automatically updated as part of the screening service and could not be manually updated through the review process, an expiring license notification will be sent to the Mail-To contact information on file 30 days prior to their license expiration date. The expiring license notifications will be activated in PMM as of 04/01/23. Providers will be notified of this change in process as of 03/01/23 via banner. c. Gainwell will provide a weekly report of any providers whose license is set to expire in 14 days. This report will be delivered weekly beginning 04/17/23, two weeks after start date of license notifications. DVHA will work with Gainwell to finalize a process to address those providers listed. d. Gainwell will activate the termination job within the PMM that will automatically end a provider?s contract with VT Medicaid when no license was obtained through the process listed above by the license end date. This termination job will be activated on 06/05/23, two months after starting license notification. Notification to providers of this change in process will be sent no later than 05/01/23, via banner. Prior to the termination job being activated, Gainwell will continue to manually terminate when no updated license information is obtained, unless written exception is received from DVHA. All exception requests will be stored as part of the provider?s electronic record within PMM. By March 1st, 2023, Gainwell will provide the following information to DVHA: The databases, services, and available in state and out of state agencies Gainwell currently uses and plans to use in order to monitor and verify provider licenses and certifications; and 2. As of December 31, 2023, all revalidations will electronically reside in PMM. By December 31, 2023, All paper files, maintained prior to the implementation of the PMM, will be cataloged and sent to secure storage. To ensure all records are available for review, all application data is now being processed through PMM and available on demand. This includes paper application sent in by providers, Gainwell inputs the paper application into PMM. 3. The Letters of Good Tax Standing have been obtained. A standard operating practice is in place documenting the process. The process of validating tax standing in writing from the Tax Department has been in effect since April 2022. Providers who had their tax standing validated prior to April 2022 via phone or email were not solicited to obtain a written notification from the Tax Commissioner. At this time, the State has determined that it is not necessary to obtain a retroactive written notification from the Tax Commissioner for tax standing prior to April 2022. As of April 2022, all tax standing reviews are validated with a letter from the Tax Department and documented in the PMM. Scheduled Completion Date of Corrective Action Plan: 1. January 1, 2024 2. December 31, 2023 3. Completed Contacts for Corrective Action Plan: Suellen Bottiggi, DVHA Director of Member and Provider Services suellen.bottiggi@vermont.gov Peter Moino, AHS Director of Internal Audit peter.moino@vermont.gov

Corrective Action Plan: 1. The corrective measures pertaining to DVHA?s enhanced oversight of Gainwell?s contractual obligation to DVHA to provide licensure validation service and documentation of active licensure will include established benchmarks for the overall improvement of the service, expansion of automated search services, progress reports and overall reduction of manual processes. By 5/1/2023 Gainwell will provide the DVHA Oversight & Monitoring Unit with Progress Reports that will be shared at the Fiscal Agent meeting and with DVHA Leadership to track progress and/or report roadblocks and escalate issues of any actual or potential failures to timely perform provider revalidations. Gainwell will use the Provider Management Module (PMM) and other services available to validate license of a provider. For those providers that cannot be validated through PMM or other services, Gainwell will send a letter notice to those providers. Letter notice must be sent no later than 30 days prior to a license expiration date. Gainwell shall submit to DVHA on a weekly basis a list of providers who have been notified that they are due for re-validation and have not responded within 14 days of license expiration date. The written detailed procedure for license updates will be finalized by 04/01/23 between the State and Gainwell and will include the following: a. Update the look forward period in the license screening service to 45 days. As a result, PMM will be updated automatically when the license screening service is available to locate an updated license. This configuration update will be in place by 04/01/23. For those licenses that the screening service is not able to locate an updated license, Gainwell will review and manually check for an updated license. If a new license is found, Gainwell will update accordingly. Gainwell will explore using Lexis Nexis as an additional service for manual review of license information and provide an update of potential solution by 03/17/23. If determined the Lexis Nexis solution is not viable, Gainwell will propose additional solution options by 05/01/23. b. Any provider whose license was not automatically updated as part of the screening service and could not be manually updated through the review process, an expiring license notification will be sent to the Mail-To contact information on file 30 days prior to their license expiration date. The expiring license notifications will be activated in PMM as of 04/01/23. Providers will be notified of this change in process as of 03/01/23 via banner. c. Gainwell will provide a weekly report of any providers whose license is set to expire in 14 days. This report will be delivered weekly beginning 04/17/23, two weeks after start date of license notifications. DVHA will work with Gainwell to finalize a process to address those providers listed. d. Gainwell will activate the termination job within PMM that will automatically end a provider?s contract with VT Medicaid when no license was obtained through the process listed above by the license end date. This termination job will be activated on 06/05/23, two months after starting license notification. Notification to providers of this change in process will be sent no later than 05/01/23, via banner. Prior to the termination job being activated, Gainwell will continue to manually terminate when no updated license information is obtained, unless written exception is received from the DVHA. All exception requests will be stored as part of the provider?s electronic record within PMM. By March 1st, 2023, Gainwell will provide the following information to DVHA: The databases, services, and available in state and out of state agencies Gainwell currently uses and plans to use in order to monitor and verify provider licenses and certifications; and 2. To ensure all providers revalidate a minimum of every 5 years, PMM is automatically assigning the revalidation due date. Providers are notified 90 days prior to the due date and again at 45 days, if the provider does not revalidate by the due date, their contract is automatically terminated. At this time, all active providers are assigned a revalidation due date and every provider converted from the old system to PMM has a schedule that will result in revalidation of all legacy providers by December 31, 2023. Exception: If a provider?s revalidation application is returned to them, the provider has until their revalidation due date, or 30 days, whichever is greater, to correct and resubmit their revalidation. Example: Provider?s revalidation due date is 12/30/23 and their revalidation application is returned on 12/29/23. The provider will have until 01/29/24 to correct and resubmit. 3. The Letters of Good Tax Standing have been obtained. A standard operating practice is in place documenting the process. The process of validating tax standing in writing from the Tax Department has been in effect since April 2022. Providers who had their tax standing validated prior to April 2022 via phone or email were not solicited to obtain a written notification from the Tax Commissioner. At this time, the State has determined that it is not necessary to obtain a retroactive written notification from the Tax Commissioner for tax standing prior to April 2022. As of April 2022, all tax standing reviews are validated with a letter from the Tax Department and documented in the PMM. Scheduled Completion Date of Corrective Action Plan: 1. January 1, 2024 2. December 31, 2023 3. Completed Contacts for Corrective Action Plan: Suellen Bottiggi, DVHA Director of Member and Provider Services suellen.bottiggi@vermont.gov Peter Moino, AHS Director of Internal Audit peter.moino@vermont.gov

Corrective Action Plan: ? One of sixty participants selected for testing turned 19 during the fiscal year. Due to the COVID-19 Public Health Emergency, states did not get authority to move customers from one MEC coverage group to another MEC coverage group until January 2021. The SoV began transitioning eligible age-off?s in March 2021. A report was created to capture anyone who had aged off since the start of the PHE. HC eligibility staff worked through the report to determine if customers were eligible to transition to another MEC coverage group. This individual was not captured on the report. They did not get transitioned until April 20, 2022 when the customer called and asked to be screened for Medicaid new adult. This case appears to be an isolated case and has since been corrected. ? For one of sixty participants, eligibility determination exceeded 45 days. Due to the COVID-19 Public Health Emergency, the SoV was accepting self-attestation for all income and resource verifications until November 1, 2021. In this case, the customer applied via the self-service portal and their MAGI-income verification line item (VLI) was pending. The SoV had reports in place at the time to pull all self-service applications with pending VLI?s to manually change them to verified. The SoV ran a report in October 2021 prior to the state resuming verifications for new applications to ensure all pending verification line items were verified and customers were enrolled timely. This appears to be an isolated case. Scheduled Completion Date of Corrective Action Plan: ? Age-off correction: April 20, 2022 ? Eligibility determination timeliness: September 15, 2021 Contacts for Corrective Action Plan: Nicole McAllister, DVHA-HAEEU HCAA II nicole.mcallister@vermont.gov Sarah York, DVHA-HAEEU HCAA I sarah.york@vermont.gov

Corrective Action Plan: The Child Development Division (CDD) has recently switched to a new IT system, Child Development Division Information System (CDDIS), that will check for the child?s IV-E eligibility and check to make sure that the child is in an eligible placement. With these checks it will allow the child to be marked as IV-E eligible or not and draw down the appropriate funding to match the eligibility. Scheduled Completion Date of Corrective Action Plan: July 31, 2023 Contacts for Corrective Action Plan: Karolyn Long ? Karolyn.Long@vermont.gov Emily Hazard ? Emily.Hazard@vermont.gov

Finding 2022-002 Contact Person: Lily Rakness Parra, County Clerk Corrective Action Planned: Washakie County agrees with the finding of 2022-002. A Sams.gov account has been activated in order to verify that entities that are being utilized for County business are not excluded from or are ineligible for participation in Federal programs or activities. Also, the County is currently drafting a Procurement Policy for Washakie County to utilize for the use of Federal funding as well as in an everyday manor of purchasing and maintenance of county facilities in order to satisfy above finding.

B. Finding 2022-002 a. Comments on Findings and Recommendations 2022-002: All tenant income is verified at initial move in and at each annual and interim certification. The instance of non-compliance pertained to a tenant that only had social security income for her March 1, 2022, Annual Recertification, meaning that her verification would have been through the HUD EIV system and would not have been transmitted electronically to the auditors. Management believes the report was properly run. Additionally, our policies include running EIV master file reports on a monthly basis which would have alerted management to the presence of a new job or unreported income in the household had there been any.

Corrective Action Plan - Finding: 2022-001: Special Tests and Provisions - Enrollment Reporting - Significant Deficiency in Internal Controls over Compliance. Corrective Action Plan: The University uses Microsoft Forms reporting to notify service units of withdrawals. The Dean (or designee) of each program must manually update the Microsoft Office report of a withdrawal ad indicate the effective date, which triggers automated emails to the appropriate units. In the one instance of late reporting, the student was required to withdraw due to a no pass of a class, but he was allowed to complete a clinical/experiential course before being withdrawn. The Dean failed to enter the student's information after the student completed the clinical/experiential course, causing the delay in reporting. The Dean has since begun using reminders on his calendar to withdraw students in this situation. In addition, our Director of Institutional Assessment is in the process of developing and programming logic in the Micrsoft Forms report that allows the Dean to enter a future withdrawal date but delays the reporting of the withdrawal to the service units until that date, allowing the Dean to enter the information into the form immediately after a no pass that requires withdrawal. This will prevent the need to manual reminders to enter the date and prevent late withdrawal notifications. Contact Person Responsible for Corrective Action: Sally Mickelson, Director of Financial Aid. Anticipated Completion Date: December 31, 2022.

Community Teamwork, Inc. agrees with this finding and will provide policies and guidance trainings to all staff on a weekly basis. CTI staff will be required to attend DHCD bi-monthly trainings. In addition, CTI has finalized the hiring of a Quality Control Manager who will start on November 28, 2022, and the addition of the Quality Control Manager will help provide ongoing internal quality control.

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, 2022. Name and address of independent public accounting firm: Powers & Sullivan, LLC 100 Quannapowitt Parkway, Suite 101 Wakefield, MA 01880 Audit period: July 1, 2021 through June 30, 2022 The finding from the June 30, 2022, 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. 84.425, 84.425C, 84.425D and 84.425U 2022-003: 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 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 consistently completed for each employee charged out of the grant. Furthermore, the forms that were completed did not include all data required by federal and state guidelines. 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 2022 totaled $2,997,132, which was paid on a bi-weekly basis throughout the year. Three of the pay periods were selected for testing, which totaled $241,339 for 73 employees paid out of the grant during those pay periods. From the pay periods selected for testing, the following known questioned costs were identified: "SEE CORRECTIVE ACTION PLAN FOR TABLE" Repeat Finding: This matter was reported as a finding in the previous year as finding 2021-004. 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 immediately began redesigning the form used for time and effort reporting, and the School District will immediately begin reissuing and recollecting the forms for the education stabilization grant for 2022, 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, 2022. Name and address of independent public accounting firm: Powers & Sullivan, LLC 100 Quannapowitt Parkway, Suite 101 Wakefield, MA 01880 Audit period: July 1, 2021 through June 30, 2022 The finding from the June 30, 2022, 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 2022-002: 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 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 consistently completed for each employee charged out of the grant. Furthermore, the forms that were completed did not include all data required by federal and state guidelines. 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 2022 totaled $1,114,060, which was paid on a bi-weekly basis throughout the year. Three of the pay periods were selected for testing, which totaled $76,705 for 25 employees paid out of the grant during those pay periods. From the pay periods selected for testing, the following known questioned costs were identified: "SEE CORRECTIVE ACTION PLAN FOR TABLE" Repeat Finding: This matter was reported as a finding in the previous year as finding 2021-003. 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 immediately began redesigning the form used for time and effort reporting, and the School District will immediately begin reissuing and recollecting the forms for the Title I grant for 2022, 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, 2022. Name and address of independent public accounting firm: Powers & Sullivan, LLC 100 Quannapowitt Parkway, Suite 101 Wakefield, MA 01880 Audit period: July 1, 2021 through June 30, 2022 The finding from the June 30, 2022, 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 2022-001: 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 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 consistently completed for each employee charged out of the grant. Furthermore, the forms that were completed did not include all data required by federal and state guidelines. 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 2022 totaled $2,026,400, which was paid on a bi-weekly basis throughout the year. Three of the pay periods were selected for testing, which totaled $136,921 for 72 employees paid out of the grant during those pay periods. From the pay periods selected for testing, the following known questioned costs were identified: "SEE CORRECTIVE ACTION PLAN FOR TABLE" Repeat Finding: This matter was reported as a finding in the previous year as finding 2021-002. 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 immediately began redesigning the form used for time and effort reporting, and the School District will immediately begin reissuing and recollecting the forms for the special education grant for 2022, 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

The Organization agrees with the finding. The staff assigned to this particular client had performance issues related to completing paperwork. The staff and their supervisor created a plan to complete outstanding reports, but the staff was terminated before this report was prepared. The Organization developed a revised tracking and submission system, and additional training on the new system will take place in November 2022.

Finding 2022-001 a. Comments on the Finding and Each Recommendation Management agrees with the finding. b. Action(s) Taken or Planned on the Finding In 2022 we hired additional oversight staff at the corporate level and changed the procedure for reviewing and approving annual certifications as well as monitoring EIV reporting. We have implanted new EIV procedures to ensure timely EIV reporting. All HUD staff has been trained on the new procedures.

Finding #2022-001 - Segregation of Duties (Prior Year Finding #2021-001) Condition: Proper segregation of duties is an important aspect of any control system. Management is responsible for the design, installation and maintenance of an appropriate system of internal control. The limited size of the District?s office staff prevents the ideal segregation of functions. The following duties lack adequate segregation of duties: The District uses e-signatures to approve purchase orders. Two individuals have access to the e-signatures and have the ability to create new vendors, enter invoices, print checks, record journal entries and record activity on the general ledger. Both individuals also have access to the payroll system. The person reviewing free and reduced food service eligibility can also enter information into the system to determine eligibility. Effect: Errors or intentional fraud could occur and not be detected timely by other employees in the normal course of their responsibilities as a result of the lack of segregation of duties. Cause: Limited number of personnel. Criteria: Segregation of duties is an aspect of internal control intended to prevent or decrease opportunities of intentional and unintentional errors and fraud. Duties and responsibilities are properly segregated if no single individual either has control over all phases of a transaction or has the ability to both make and conceal an error, whether such error is intentional or unintentional. Recommendation: The Board of Education and the Superintendent should continue to monitor the transactions and the financial records of the District. We also encourage the District to continue to identify cost effective opportunities to improve the design of the internal control structure. Response: We agree with this finding but do not believe it is cost effective to increase the office staff in an attempt to bring about a more effective segregation of duties. The Superintendent approves purchase orders and the Board of Education approves monthly accounts payable checks, and one of the school secretaries or the board treasurer reviews the bank reconciliations. The Board of Education and Superintendent will continue to monitor transactions of the District. Finding #2022-001 - Segregation of Contact Person: Heather Droessler Anticipated Completion: Not applicable