Corrective Action Plans

Management's Views and Corrective Action Plan Finding 2023-001 - Non-Compliance with Timely and Accurate Student Enrollment Change Submissions to the National Student Loan Data System (Significant Deficiency) Grantor: U.S. Department of Education Program: Student Financial Assistance Cluster Assistance Listing#: 84.268, 84.063 Award Titles: Federal Direct Student Loan Program, Federal Pell Grant Program A ward Years: 7 /2022 - 6/2024 Management agrees with the finding and proposes the following corrective action plan: Corrective Action Plan: The prior year's corrective action plan was successful in addressing two of three issues identified in previous audits in enrollment reporting. These additional steps will be taken to address the remaining issue noted during the 2023 audit, which resulted in a repeat finding of 2022-001. When a student returns from a leave of absence, PeopleSoft updates the students' program begin date for the student's return date rather than the original program begin date. Daryl Whitford, Registrar, will continue reviewing program begin dates for students returning from a leave of absence to ensure the proper program begin date is reported to NSLDS. In addition, we will review if any PeopleSoft enhancements can be made to provide additional comfort that the program begin elates are accurate in these circumstances. Daryl Whitdord, Registrar, who is responsible for enrollment reporting at Brigham Young University Hawaii will continue to provide training to staff who participate in enrollment reporting to ensure that they are aware of the campus and program enrollment changes to be reported, the details to be reported for each change, and the importance of submitting changes timely. Also, Daryl Whitford, Registrar, will oversee the implementation of a control wherein the University will review program begin dates for students returning from leave of absence to ensure the proper program begin date is reported to NSLDS. Timing: Daryl Whitford, Registrar, will be responsible for overseeing that the items as noted in the corrective action plan section above will be implemented by September 1, 2024. Signed and Acknowledged, Daryl Whitford, Registrar BYU-Hawaii daryl.whitford@byuh.edu 808-675-3730

The following corrective actions have been put into place in order to address these findings:

•       The district will follow all guidelines outlined by the USDA during the verification process.

•       A change in personnel was made.

•       Child nutrition specialists from the Department of Education, Child Nutrition Unit have provided technical assistance to district employees on the verification process. This technical assistance included assistance in reviewing the correct number of applications, the process in which the confirming official confirms the applications, the correct documents that may be submitted for income documentation, the correct use of tracker forms, and the procedure for reclassifying applications after the verification process. This technical assistance was given in the spring semester this school year and will be repeated next year to ensure that the guidelines are followed.

•       District personnel will properly review the supporting documentation provided during the verification process which will include ensuring the correct number of applications are verified, that the confirming official confirms the applications, that the correct documentation of income is received, that the tracker forms are used correctly, and that the applications are reclassified after the verification process is completed, if necessary. This will be a multi layered review that will include the cafeteria managers, child nutrition director, director of federal programs, and superintendent.

There corrections had gone into effect Jan. 2024.

Response and Corrective Action Plan The Authority has attempted to segregate accounting duties by having a person who does not initiate, prepare or post disbursements review the bank statements and co-sign all checks. The Authority will continue to monitor its policies and procedures in an effort to improve control efficiencies, however, at this time, the Authority has determined that the cost of eliminating the deficiency would exceed its benefit.

FINDINGS - MAJOR FEDERAL AWARD PROGRAM AUDIT Department of Housing and Urban Development Finding, 2023-002: Major Program: Supportive Housing for the Elderly (Section 202 Capital Advance - Accumulated Balance), Federal Assistance Listing Number 14.157 RECOMMENDATION The auditor recommends ensuring all current and new staff are trained on tenants’ 90-day EIV reports and ensuring they are generated within the required time period to verify tenant information promptly and help reduce errors in subsidy payments. ACTION TAKEN The Project will be monitoring use of the EIV system for move ins and recertifications.

FINDINGS - MAJOR FEDERAL AWARD PROGRAM AUDIT Department of Housing and Urban Development Finding, 2023-001: Major Program: Supportive Housing for the Elderly (Section 202 Capital Advance - Accumulated Balance), Federal Assistance Listing Number 14.157 RECOMMENDATION The auditor recommends ensuring all tenants’ paperwork is thoroughly reviewed and accurately used in the calculation of the tenant’s required monthly rent and HUD’s tenant assistance payments. ACTION TAKEN The Project will be billing the tenant for the $264 and reimbursing HUD for additional tenant assistance payments of $264 due to the Project.

Finding 2023-006: Material Weakness in Internal Control over Compliance - Special Tests and Provisions Corrective Action Plan: I. The DLR RA Management Analyst will prepare and submit all ETA Reports (Preparer). a. The Management Analyst will initially enter all data into the report and ensure its initial accuracy. b. The Management Analyst will also be responsible for addressing any warning message(s) or error message(s) that are generated by the reporting system. c. Once the data has been entered and all warning and error messages have been addressed, the Management Analyst will notify the DLR RA Senior Internal Auditor that the ETA Report is complete and ready for their review. 2. The DLR RA Senior Internal Auditor will Review and Sign Off on all ETA reports (Reviewer) a. The Senior Auditor will review the completed report to ensure its accuracy. b. If an issue is found during the review, it will be researched and corrected. c. Once the Senior Internal Auditor has verified all data elements within the report are correct, they will email the Management Analyst signing off on the data presented and give approval for the Management Analyst to submit the final report. 3. The Management Analyst submits the final report. 4. Once submitted, the Management Analyst will print the submitted copy of the final report to PDF. 5. Once in PDF form, the Management Analyst will add the following notes: a. Prepared By: [Name] b. Date and Time c. Reviewed By: [Name] d. Date and Time 6. With the "Prepared/Reviewed Note" added, it is now considered the "Finalized Report." 7. The Management Analyst will save an electronic copy of the Finalized Report along with copies of any supporting documentation and any email communications between the "Preparer" and the "Reviewer" to the QA records to be retained according to DLR Record Retention policies. 8. All RA Staff can access all finalized reports through the RA MS SharePoint site. Contact Person: Pauline Heier, Director, Reemployment Assistance Anticipated Completion Date: No anticipated completion date was listed in the separately issued audit report.

Project Legal Name: The Harry and Jeanette Weinberg Terrace, INC HUD Project No.: 502-EE015 Audit Firm: CohnReznick Period covered by the audit: Year end June 2023 Corrective Action Plan prepared by: Name: Shantay Hall Position: HUD Compliance Specialist Telephone Number: 571-307-6571 The following is a recommended format to be followed by the auditee for preparing a corrective action plan: A. Current Findings on the Schedule of Findings, Questioned Costs and Recommendations 1. Finding # 2023‐001; Section 202 Supportive Housing for the Elderly, Assistance Listing 14.157 a. Recommendation: Management should establish procedures and monitor compliance with those procedures to ensure that tenant security deposits are correctly recorded, tenant eligibility is correctly determined and that tenant lease files are properly maintained in accordance with the requirements of HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs b. Action(s) Taken or Planned on the Finding The inspection was conducted under previous management. The Franklin Johnston Group took over July 1st, 2023. The Franklin Johnston EIV policies and procedures require site staff to Run Existing tenant searches within 90 days prior to the move in date which is required to be uploaded to the assigned Compliance specialist for review prior to move in approvals. Although HUD requires quarterly reports, we require monthly. Site teams are only permitted to pull the “By Head of Household Report” at the time of recertification. 90- day EIV’s are to be ran within 90days of the anticipated voucher submission date. Site staff are required to go through our approval process, staff are not required to perform a move with without Compliance Approval. The Franklin Johnston performs quarterly audits to ensure that these processes are being followed along with ensuring that the files are being properly maintained. All site teams members have been trained as it relates to these policies. In addition to this training all site teams are required to attend monthly EIV training/Policies and procedures trainings according to HUD guidelines.

Compliance and Controls over Compliance – Eligibility Home Investment Partnership Program, AL# 14.239 Material Weakness Accord did not have controls in place to ensure that eligibility criteria and rent calculations were being reviewed and/or approved by someone other than the individual performing the initial determination or annual reexamination. Actions Taken or Planned: Management agrees with this finding. As of December 31, 2023, the Organization has sold all properties financed by HOME funds. Contact Persons: Robert Pickering, Chief Financial Officer

Finding: The Department of Children, Youth, and Families did not have adequate internal controls over and did not comply with financial reporting requirements for the Child Care and Development Fund Cluster. Questioned Costs: Assistance Listing # 93.575 93.575 COVID-19 93.596 Status: Corrective action in progress Corrective Action: The Child Care and Development Fund (CCDF) program was previously managed by the Department of Social and Health Services and the Department of Early Learning. Since the program transitioned in 2019, the Department has been making efforts to strengthen internal controls over payments to child care providers and other CCDF grant requirements. The Department implemented grant-level management of all federal funds, including the CCDF grant. The Department allocated the CCDF grant to eligible clients and allowable activities in compliance with 45 CFR 98.67. As part of the audit resolution process, the Department of Health and Human Services (HHS), Administration for Children & Families (ACF), which oversees the CCDF program at the federal level, reviews all State Auditor’s Office (SAO) findings and issues management decision letters. The Department received a management decision letter dated October 3, 2023, from HHS for finding 2021-033 (2020-038) which states: “The ACF noted that the auditor raised concern about the Department’s accounting procedures and efforts made to trace expenditures at the transaction-level. As the basis for the finding, the auditor used CFRs (200.53, 200.303, 200.403, 200.410) that do not apply to CCDF. Federal regulations allow Lead Agencies to expend and account for CCDF funds in accordance with their own procedures.” In addition, ACF did not sustain the disallowance of questioned costs and stated: “Although the Department’s internal controls were lacking, the ACF has not identified any funds that were expended on ineligible activities.” The ACF recommended: “…that the Department work with the auditors to determine an appropriate methodology that can be tested to ensure child care payments comply with Federal regulations.” The Department met with ACF and SAO on November 8, 2023, to discuss the ACF decision at which time ACF upheld the above statements that the activities allowed finding was not substantiated. The Department is committed to collaborating with SAO to determine an appropriate methodology that identifies a sampling unit that can be used to accurately test compliance. The SAO maintained that the program is not auditable without child-level data. The Department does not currently have the staff and resources to develop and maintain the business process redesign, as well as the information technology initiatives necessary to meet the level of assurance recommended by SAO. In response to the auditor’s recommendations, the Department submitted a budget request for the 2024 supplemental budget. Funding was provided to develop and maintain the business process that would allow adjustments to include child-level data beginning July 2024. The conditions noted in this finding were previously reported in findings 2022-044 and 2021-038. Completion Date: Estimated December 2025 Agency Contact: Stefanie Niemela Audit Liaison PO Box 40970 Olympia, WA 98504-0970 (360) 725-4402 stefanie.niemela@dcyf.wa.gov

Finding: The Department of Children, Youth, and Families did not have adequate internal controls over and did not comply with matching, level of effort, and earmarking requirements for the Child Care and Development Fund Cluster. Questioned Costs: Assistance Listing # 93.575 93.575 COVID-19 93.596 Amount $0 Status: Corrective action in progress Corrective Action: The Child Care and Development Fund (CCDF) program was previously managed by the Department of Social and Health Services and the Department of Early Learning. Since the program transitioned in 2019, the Department has been making efforts to strengthen internal controls over payments to child care providers and other CCDF grant requirements. The Department implemented grant-level management of all federal funds, including the CCDF grant. The Department allocated the CCDF grant to eligible clients and allowable activities in compliance with 45 CFR 98.67. As part of the audit resolution process, the Department of Health and Human Services (HHS), Administration for Children & Families (ACF), which oversees the CCDF program at the federal level, reviews all State Auditor’s Office (SAO) findings and issues management decision letters. The Department received a management decision letter dated October 3, 2023, from HHS for finding 2021-033 (2020-038) which states: “The ACF noted that the auditor raised concern about the Department’s accounting procedures and efforts made to trace expenditures at the transaction-level. As the basis for the finding, the auditor used CFRs (200.53, 200.303, 200.403, 200.410) that do not apply to CCDF. Federal regulations allow Lead Agencies to expend and account for CCDF funds in accordance with their own procedures.” In addition, ACF did not sustain the disallowance of questioned costs and stated: “Although the Department’s internal controls were lacking, the ACF has not identified any funds that were expended on ineligible activities.” The ACF recommended: “…that the Department work with the auditors to determine an appropriate methodology that can be tested to ensure child care payments comply with Federal regulations.” The Department met with ACF and SAO on November 8, 2023, to discuss the ACF decision at which time ACF upheld the above statements that the activities allowed finding was not substantiated. The Department is committed to collaborating with SAO to determine an appropriate methodology that identifies a sampling unit that can be used to accurately test compliance. The SAO maintained that the program is not auditable without child-level data. The Department does not currently have the staff and resources to develop and maintain the business process redesign, as well as the information technology initiatives necessary to meet the level of assurance recommended by SAO. In response to the auditor’s recommendations, the Department submitted a budget request for the 2024 supplemental budget. Funding was provided to develop and maintain the business process that would allow adjustments to include child-level data beginning July 2024. The conditions noted in this finding were previously reported in findings 2022-042, 2021-036 and 2020-040. Completion Date: Estimated December 2025 Agency Contact: Stefanie Niemela Audit Liaison PO Box 40970 Olympia, WA 98504-0970 (360) 725-4402 stefanie.niemela@dcyf.wa.gov

Finding: The Department of Children, Youth, and Families did not have adequate internal controls over and did not comply with client eligibility requirements for child care services paid with the Child Care and Development Fund and Temporary Assistance for Needy Families funds. Questioned Costs: Assistance Listing # 93.558 93.575 93.575 COVID-19 93.596 Status: Corrective action in progress Corrective Action: The Child Care and Development Fund (CCDF) program was previously managed by the Department of Social and Health Services and the Department of Early Learning. Since the program transitioned in 2019, the Department has been making efforts to strengthen internal controls over payments to child care providers and other CCDF grant requirements. The Department will continue to maintain internal controls using our program integrity procedures, utilizing a combination of centralized and local case reviews to identify error trends, identify root causes, and develop solutions to the root causes. To address the fiscal year 2023 eligibility audit findings, the Department will: • Conduct root cause analysis of internal audit findings, particularly for cases with errors due to household composition and approved activities, and develop appropriate corrective actions as needed. • Develop and deliver updated household composition training for all staff. • Improve and publish the desk aid outlining simplified eligibility determination process that includes procedures for those families who do not have an approved activity. The conditions noted in this finding were previously reported in findings 2022-036, 2021-035, 2020-039, 2019-032, 2018-030, 2017-026, 2016-023, 2015-026, 2014-026, 2013-017 and 2012-30. Completion Date: Estimated July 2024 Agency Contact: Stefanie Niemela Audit Liaison PO Box 40970 Olympia, WA 98504-0970 (360) 725-4402 stefanie.niemela@dcyf.wa.gov

Finding: The Department of Social and Health Services did not have adequate internal controls to ensure individuals are eligible to receive benefits for the Money Follows the Person program. Questioned Costs: Assistance Listing # 93.791 Amount $0 Status: Corrective action complete Corrective Action: The Department partially agrees with the finding. The Department agrees that the Financial and Social Services Communication (14-443) forms were not provided to terminate the enrollment of the four exceptions identified in the finding. However, in those exceptions, the Roads to Community Living (RCL) disenrollment communication was made in accordance with the existing Nursing Facility Case Management policy as defined in Chapter 10 of the Long-Term Care (LTC) Manual. In addition, all clients met eligibility criteria for RCL services or were converted to another Home and Community Based program within the 365-day RCL demonstration year limitation. In these cases, the client was converted to a state plan or waiver with the new program start date noted on the 14-443 forms. The 14-443 form is a communication tool used by the Department’s public benefit specialists. For Modified Adjusted Gross Income (MAGI) enrolled Medicaid participants, benefits are managed by the Washington State Health Care Authority and the 14-443 form is not required or used by the Department’s public benefit specialists. This MAGI beneficiary communication detail was not articulated in the RCL chapter of the LTC Manual. As of May 2024, the Department updated Chapter 29 of the LTC Manual to clarify instructions related to when the 14-443 form must be completed for MAGI participants and what needs to be included on the form when it is required. Completion Date: May 2024 Agency Contact: Richard Meyer External Audit Compliance Manager PO Box 45804 Olympia, WA 98504-5804 (360) 664-6027 Richard.Meyer@dshs.wa.gov

Finding: The Health Care Authority did not have adequate internal controls over and did not comply with federal provider eligibility requirements for the Medicaid and Children’s Health Insurance Program. Questioned Costs: Assistance Listing # 93.767 93.767 COVID 93.775 93.777 93.777 COVID 93.778 93.778 COVID Amount $0 Status: Corrective action in progress Corrective Action: The Authority partially concurs with the finding. The Authority does not concur that four providers did not receive a proper license check, nor that the backdated provider was noncompliant with regulations prior to receiving a National Provider Identifier (NPI). When a provider’s license expires, the Authority enters an end date for the provider taxonomy to prevent future payments. The Authority does not pay claims without an NPI and this is compliant with federal requirements. Corrective action has been in process to address revalidation issues. As of January 1, 2024, the Authority implemented a system change moving the revalidation date to 90 days before the end of the five-year period. The Authority is developing additional procedures to strengthen internal controls over provider enrollment. The conditions noted in this finding were previously reported in findings 2022-055, 2021-047, 2020-046, 2019-048, 2018-042, 2017-033, and 2016-035. Completion Date: Estimated December 2024 Agency Contact: William Sogge, CPA, CIA External Audit Liaison PO Box 45502 Olympia, WA 98504-5502 (360) 725-5110 william.sogge@hca.wa.gov

Finding: The Department of Children, Youth, and Families did not have adequate internal controls to ensure group care facility employees and adults residing in prospective caregivers’ households had cleared background checks before having unsupervised access to children. Questioned Costs: Assistance Listing # 93.658 93.658 COVID-19 Amount $0 Status: Corrective action complete Corrective Action: The Department partially concurs with the finding. The auditors identified two exceptions where fingerprint checks for two family foster home adults were completed two days later than the required timeline of 15 calendar days. The delay was due to the misspelling of one applicant’s last name in the system. Upon correction, the applicants subsequently completed the fingerprint checks and were determined eligible. As stated in the finding’s Cause of Condition, the Department developed a corrective action plan to address the internal control deficiencies in response to the prior year’s finding which had not been fully implemented within the current audit period. The Department is confident that all staff who work with children and youth have cleared background checks. As of April 1, 2023, the Department implemented a new process for processing background checks for group care facilities to strengthen internal controls, documentation, and clarification on the “effective date.” The updated process is outlined below: • A new form was created with clear instructions for the group care facilities to provide the applicant/employee information, including the background check confirmation code, directly to the Department’s Background Check Unit (BCU). • The BCU works with the applicant/employee through the fingerprint background check process. • The results are sent directly to the BCU, at which time they complete a child abuse/neglect history check and if needed a suitability assessment. The BCU documents the results in FamLink with the date the background check is completed. • The BCU emails the results to the group care facility and the Department’s Licensing Division (LD) group. If the applicant/employee is cleared and is not a renewal, LD staff adds the applicant/employee to the group care facility in FamLink with the clearance information attached. The conditions noted in this finding were previously reported in finding 2022-050. Completion Date: April 2023 Agency Contact: Stefanie Niemela Audit Liaison PO Box 40970 Olympia, WA 98504-0970 (360) 725-4402 stefanie.niemela@dcyf.wa.gov

Finding: The Department of Children, Youth, and Families did not have adequate internal controls to ensure monthly foster care maintenance payments to children’s caregivers were adequate and accurate for the Foster Care program. Questioned Costs: Assistance Listing # 93.658 93.658 COVID-19 Amount $0 Status: Corrective action in progress Corrective Action: The Department is committed to strengthening internal controls and complying with grant requirements. As stated in the finding’s Cause of Condition, the Department utilizes FamLink as the case management system for the Foster Care program which, due to system limitations, did not have the reporting capabilities to track rate setting reviews during the audit period. To assist with tracking rate setting requirements, the Department: • Created a new report in FamLink to assist rate assessors in identifying six-month reviews that have not been performed timely. • Implemented monthly tracking by supervisors to assist with internal controls and compliance. In response to the auditor’s recommendations and to assist in compliance, the Department has submitted a request to the technical team for an update to the report to also show when the next rate assessment is due. Completion Date: Estimated June 2024 Agency Contact: Stefanie Niemela Audit Liaison PO Box 40970 Olympia, WA 98504-0970 (360) 725-4402 stefanie.niemela@dcyf.wa.gov

Finding: The Department of Social and Health Services did not have adequate internal controls over and did not comply with federal requirements to ensure subrecipients of the Refugee and Entrant Assistance programs received required single audits, and that it followed up on findings and issued management decisions. Questioned Costs: Assistance Listing # 93.566 Amount $0 Status: Corrective action in progress Corrective Action: The Department concurs with the finding. By September 2024, the Department’s Office of Refugee and Immigrant Assistance (ORIA) will follow up with the remaining 35 subrecipients and require the completion of the Subrecipient Federal Financial Assistance form for fiscal year 2023, as needed. By November 2024, ORIA will: • Follow up with the remaining 35 subrecipients to verify that they completed a single audit if they received $750,000 or more in federal assistance. • Inform any subrecipients that have not been audited about the single audit requirement. • Work with Economic Services Administration (ESA) accounting staff to review all completed audit reports and, for any findings found, issue a management decision on the effectiveness of the subrecipients’ proposed corrective actions to address the findings. • Work with ESA accounting unit to establish and implement effective internal controls and written procedures to: o Identify subrecipients who receive $750,000 or more annually in federal assistance from all sources. o Verify if subrecipients complete required audits, if applicable, and take appropriate action if audits are not completed. o Review single and program-specific audit reports for findings. o Write and issue a management decision, when appropriate, within six months outlining the Department’s determination of the adequacy of the subrecipient’s proposed corrective actions to address the finding. o Monitor the subrecipient’s corrective action plan for timely and effective completion. By December 2024, ESA accounting staff will track and monitor subrecipient activities to ensure appropriate and timely corrective action is taken to resolve single and programmatic audit findings. By March 2025, ORIA and ESA accounting unit will train all program staff responsible for monitoring the new procedures to ensure a full understanding of the shared responsibilities for compliance with department policies. Completion Date: Estimated March 2025 Agency Contact: Richard Meyer External Audit Compliance Manager PO Box 45804 Olympia, WA 98504-5804 (360) 664-6027 Richard.Meyer@dshs.wa.gov

Finding: The Department of Children, Youth, and Families did not have adequate internal controls over and did not comply with requirements to ensure payments to child care providers paid with Temporary Assistance for Needy Families funds were allowable and property supported. Questioned Costs: Assistance Listing # 93.558 Amount $107,338,725 Status: Corrective action in progress Corrective Action: The Working Connections Child Care (WCCC) program was previously managed by the Department of Social and Health Services (DSHS) and the Department of Early Learning. Since the program transitioned in 2019, the Department has been making efforts to strengthen internal controls over payments to child care providers and other grant requirements. The Department implemented grant-level management of all federal funds, including the Temporary Assistance for Needy Families grant. This consisted of making significant grant level adjustments between allowable grant sources to properly spend grant dollars within the allowable period of performance and ensure level of effort and matching requirements were met. The Department’s grant adjustments were processed based on eligible clients and allowable activities. The Department does not currently have the staff to develop and maintain the business process redesign, as well as the information technology initiatives necessary to meet the level of assurance recommended by the State Auditor’s Office. In response to the auditor’s recommendations, the Department submitted a budget request for the 2024 supplemental budget. Funding was provided to develop and maintain the business process that would allow adjustments to include child-level data beginning July 2024. The conditions noted in this finding were previously reported in findings 2022-035 and 2021-028. Completion Date: Estimated December 2025 Agency Contact: Stefanie Niemela Audit Liaison PO Box 40970 Olympia, WA 98504-0970 (360) 725-4402 stefanie.niemela@dcyf.wa.gov

Finding: The Department of Social and Health Services did not have adequate internal controls over and did not comply with requirements for monitoring subrecipients to ensure payments were allowable, properly supported and met period of performance requirements for the Coronavirus State and Local Fiscal Recovery Funds. Questioned Costs: Assistance Listing # 21.027 COVID-19 Amount $312,659,850 Status: Corrective action in progress Corrective Action: The Department partially concurs with the finding. The Department’s Office of Refugee and Immigrant Assistance (ORIA) administered this funding through the Washington COVID-19 Immigrant Relief Fund program and contracted with a subrecipient organization to conduct eligibility determinations to approve and disburse funds to undocumented immigrants. This program is now closed, with all subrecipient contracts ended and the final payments sent in early 2023. The Department is taking action to strengthen internal controls over subrecipient monitoring for ORIA’s contracts. By July 2024, the Department will: • Complete a review of all active contracts utilizing federal funding to ensure subrecipients are accurately identified. • Explore the feasibility of increasing ORIA and Economic Services Administration accounting staff resources to support the workload increase associated with monitoring subrecipients. By October 2024, the Department will convene a work group with contracts and accounting staff to create effective internal controls and written procedures for fiscal and program monitoring of ORIA’s subrecipient contracts. This will include the following: • Verify the subrecipient status for each contract is correctly determined and recorded in the Agency Contracts Database. • Include the required subrecipient language in the contract. • Obtain a copy of the indirect rate certification or cost allocation plan from the subrecipient. • Complete risk assessments. • Create appropriate monitoring plans for each subrecipient. • Conduct fiscal monitoring of each subrecipient to obtain assurance that the use of federal funds complies with federal laws and regulations. • Create corrective action plans when required. By January 2025, the Department will ensure all ORIA program staff responsible for monitoring receive training on the updated procedures. In addition, the Office of the Secretary will request the Department’s Internal Audit and Consultation office conduct an internal audit of ORIA to ensure the program implements strong internal controls, properly accounts for federal funds, and materially complies with federal requirements. The Department does not concur with the questioned costs. The funds were used to assist Washington workers/families who were affected by the COVID-19 pandemic but were unable to access federal stimulus programs and other social support due to their immigration status. Repayment of these funds would only hinder the state’s ability to provide critical services to our clients. If the grantor contacts the Department regarding the questioned costs, the Department will discuss this with the Department of Health & Human Services and will take additional action as appropriate. Completion Date: Estimated January 2025 Agency Contact: Richard Meyer External Audit Compliance Manager PO Box 45804 Olympia, WA 98504-5804 (360) 664-6027 Richard.Meyer@dshs.wa.gov

Finding: The Housing Finance Commission did not have adequate internal controls over earmarking requirements for the Homeowner Assistance Fund program. Questioned Costs: Assistance Listing # 21.026 COVID-19 Amount $0 Status: Corrective action in progress Corrective Action: The Commission will take the following corrective actions to strengthen controls over earmarking requirements for the Homeowner Assistance Fund (HAF) program: • Develop a system to track and monitor expenditures in relation to overall program expenditures to ensure earmarking requirements are within allowable parameters. • Select an increased percentage of approved, denied, and withdrawn HAF applications that have previously been reviewed by the contractor, as part of the Quality Control process, for a secondary review by program staff. • Review a selection of HAF applications independent of the Quality Control process performed by the contractor. • Review a selection of approved HAF applications prior to disbursing funds to confirm eligibility determinations are proper. Completion Date: Estimated June 2024 Agency Contact: Lucas Loranger Senior Finance Director 1000 Second Ave, Suite 2700 Seattle, WA 98104-3601 (206) 464-7139 Lucas.Loranger@wshfc.org

Finding: The Housing Finance Commission did not have adequate internal controls over eligibility requirements for the Homeowner Assistance Fund program. Questioned Costs: Assistance Listing # 21.026 COVID-19 Amount $0 Status: Corrective action in progress Corrective Action: The Commission will take the following corrective actions to strengthen controls over eligibility requirements for the Homeowner Assistance Fund (HAF) program: • Select an increased percentage of approved, denied, and withdrawn HAF applications that have previously been reviewed by the contractor, as part of the Quality Control process, for a secondary review by program staff. • Review a selection of HAF applications independent of the Quality Control process performed by the contractor. • Review a selection of approved HAF applications prior to disbursing funds to confirm eligibility determinations are proper. Completion Date: Estimated June 2024 Agency Contact: Lucas Loranger Senior Finance Director 1000 Second Ave, Suite 2700 Seattle, WA 98104-3601 (206) 464-7139 Lucas.Loranger@wshfc.org