Corrective Action Plans

Federal Award Finding 2025-003 - Material Weakness, Material Noncompliance - Special Tests and Provisions, Mortgage Reserve Fund, Equipment Replacement Reserve Fund, and Special Escrows Finding: During the audit period, Henry C. Nevins Home, Inc. did not make all required deposits into the reserve for replacement fund in accordance with the terms of the applicable HUD Regulatory Agreement. The required monthly reserve deposits were either not made or were made in amounts less than those required. Recommendation: We recommend that Henry C. Nevins Home, Inc., in coordination with the court-appointed receiver and HUD, establish procedures to ensure that reserve for replacement deposits are made timely and in accordance with the HUD Regulatory Agreement, or that appropriate waivers or modifications are obtained from HUD where compliance is not currently feasible. Action Taken: Management acknowledges the audit finding related to the failure to make required deposits into the reserve for replacement fund in accordance with the HUD Regulatory Agreement. As disclosed in the notes to the financial statements, during the audit period the Organization was subject to a court-appointed receivership effective September 12, 2025 and is in default under its HUD-insured mortgages. As part of the receivership, control over substantially all cash management and financial decision-making activities was assumed by the court-appointed receiver. Management believes that the conditions giving rise to this finding are directly related to liquidity constraints. Given the complexities of the receivership and regulatory environment, a specific timeline for remediation is not able to be determined. As a result of the loan default, the mortgage was assigned to the U.S. Department of Housing and Urban Development. Since the appointment of the Receiver, responsibility for cash management, financial oversight, and debt service planning has transitioned to the Receiver. The Receiver and the Organization are actively evaluating available options to address the loan default which includes marketing the Organization for a sale. Interim corrective actions include enhanced cashflow monitoring, prioritization of expenses required to continue operations, and ongoing communication with HUD regarding the sale process. Management believes that these actions will address the conditions identified and result in the satisfaction of the HUD loan. Responsible Person: Paul Valentine, Receiver Target Completion Date: September 30, 2026 Status: In process

Corrective Action: The City will implement standardized inventory management procedures for federally funded assets; maintain detailed item-by-item inventory records; conduct periodic management reviews of inventory listings; and ensure all required equipment is properly tracked and reported. Responsible Individual(s): Michael Elizalde, Grants & Strategic Initiatives Director; Vidal Roman, Finance Director. Timeline: In Progress. Estimated September 2026.

Corrective Action: The City has begun implementing formal equipment management procedures for federally funded assets, including the green tagging of grant-funded assets utilizing the RCI asset management system. The City will conduct and document a physical inventory of federally funded equipment at least once every two years; reconcile inventory results to property records; investigate discrepancies timely; and retain supporting documentation to demonstrate compliance with federal equipment management requirements. Responsible Individual(s): Michael Elizalde, Grants & Strategic Initiatives Director; Vidal Roman, Finance Director. Timeline: In Progress. Estimated September 2026.

2025-001 Internal Controls over Allowable Cost – Disaster Assistance Grants Point of Contact: Rachael Wilkinson, Director, APOHSEP Management’s response and corrective action plans are as follows: 1. Management acknowledges the recommendation and has taken steps to enhance oversight of the Federal Emergency Management Agency (FEMA) reimbursement requests, including those prepared by third-party consultants. Ascension Parish Government is implementing a formalized review process by the Ascension Parish Office of Homeland Security and Emergency Preparedness (APOHSEP) prior to submission to ensure that all expenditures are accurate, properly supported, and classified in accordance with FEMA requirements. 2. This process will include reconciling reimbursement requests with underlying payroll records, equipment logs, and other supporting documentation, as applicable. Management will continue to monitor FEMA submissions to ensure compliance with applicable federal guidelines and strengthen documentation of review procedures. 3. Additionally, Ascension Parish Government will amend the project worksheet to address the identified errors

Name of Contact Person: Brent Boren, Superintendent. Recommendation: We recommend that the District only charge costs that are allowable under the grant agreement. We also recommend that the District contact ISBE to discuss if the District will need to return the funds reimbursed by the Illinois School Board of Education for these unallowed expenditures. Corrective Action: The District will ensure that all costs charged to the Title I grant are allowable per the grant agreement going forward.

Finding Number: 2025-001 Finding Title: Equipment and Real Property Management Program: 14.218 Community Development Block Grants/Entitlement Grants Name of Contact Person Responsible for Corrective Action: Jenn Moses, Manager of Planning and Community Development Corrective Action Planned: • Conduct a training for community development staff on federal regulations related to equipment and real property management • Assign specific employees oversight of equipment inventory • Coordinate with the finance department to ensure all CDBG assets are appropriately categorized within inventory • Implement monitoring protocol for yearly audit of the inventory Anticipated Completion Date: November 30, 2026

Finding 2025-002 – Significant Deficiency and Noncompliance - Lack of Required Uniform Guidance Policies and Procedures Condition: The City did not update their federal policies and procedures to be in full compliance with Uniform Guidance. Corrective Action: The City is in the process of updating and adopting written policies and procedures that are in compliance with Uniform Guidance. Anticipated Completion Date: December 31, 2026 Responsbile Official: John Szymanski, City Manager

Condition/Finding: The District failed to properly report capital assets at historical cost and/or include purchases on the capital asset report that exceed the capitalization threshold of $2,000. In addition, depreciation was not being calculated for all eligible assets. Recommendation: Procedures should be established and implemented to ensure all eligible items purchased are included in the capital asset report and depreciation is properly calculated. All eligible items should be tagged as received. Also, all items includedon the capital asset report should be reviewed to ensure the items are still in use. . Method of Implementation:Historical ledger reconstruction & system migration: The District will initiate a Request for Proposal to engage a professionalvaluation firm to perform a comprehensive reconstruction of the fixed asset ledger at historical cost. Upon completion, theresulting data file will be migrated into the district’s financial software, Edumet, to automate future depreciationcycles.

Federal Agency: Various Federal Program: Research and Development Cluster Assistance Listing Number: Various Federal Award Numbers: Various Finding No.: 2025-003 Corrective Action Plan: The College will continue to strengthen and monitor internal controls over the management of federally funded equipment to sufficiently address this finding. The College completed a comprehensive physical inventory of federally-funded equipment as of June 30, 2026. The inventory results were successfully reconciled to the College's fixed asset register. Going forward the accounting group, in collaboration with the Office of Sponsored Programs and departmental equipment custodians, will perform and document the required physical inventory, update the asset register to reflect current locations and statuses, and maintain complete documentation supporting all inventory activities. Developed in accordance with federal requirements, the College also implemented a new equipment disposal policy for all federally-funded equipment, effective July 1, 2026. Timeline for Implementation of Corrective Action Plan: The College completed the corrective action plan by June 30, 2026. Management will periodically monitor compliance to ensure federally-funded equipment is properly inventoried, documented, and disposed of in accordance with federal requirements.

Finding #2025-002 – Reporting Description of Finding: As a recipient of a direct federal award under the Public Safety Partnership and Community Policing Grants (ALN 16.710) program, the County is required to comply with mandatory compliance requirements. Per the OMB Compliance Supplement, this federal award has a financial reporting requirement and a performance reporting requirement. The County’s year end financial report submitted to the grantor indicated that the project was completed as of December 31, 2025, and the full grant award had been expended. Additionally, the performance report submitted for the period ending July 31, 2025, indicated that all equipment had been purchased and delivered. However, per the financial records of the County, there were unexpended grant funds as of December 31, 2025, as the final program deliverables had not been received or invoiced. Statement of Concurrence of Nonconcurrence: Concurrence Planned Corrective Action: This was a unique circumstance where federal awards were being suspended by our federal government and then reinstated. Our goal was to draw down on the COPS Grant for $715,000 and spend the funds on the Dispatch radios as quickly as possible before the funds were suspended again. Reported to the federal award program as such and then there was a delay in the purchasing of all radios and equipment. Anticipated Completion Date: The specified federal award program has been completed and closed.

Finding 2025-001 Financial Close Process Condition: During the audit, it was noted that the Organization lacked a robust financial close and review process. This deficiency resulted in multiple material audit adjustments across key financial statement accounts, including inventory, net assets, revenues, deferred revenue, and related activity accounts. These adjustments were proposed by the auditors and subsequently recorded by management in order to fairly present the financial statements in accordance with generally accepted accounting principles. The extent and materiality of the adjustments indicate that the Organization's existing closing procedures were insufficient to identify and correct errors prior to the audit. Corrective Actions Taken or Planned: A Part-Time Accounting Manager was hired in October 2025 to assist with financial reporting and documentation. The Organization implemented a review and sign-off process for financial reports at board meetings. The Organization will develop a financial close calendar with clear deadlines. We will create a standard operating procedure for account reconciliations, journal entries, and financial reporting with assignments to specific staff.

Physical Inventory Name of Contact Person: Kenneth M. Guye, Director of Finance/Administration Corrective Action: The Physical Inventory will commence immediately and is expected to finish by May 10, 2026. Proposed Completion Date: May 10, 2026

Finding No. 2025-004 – Improvement required over the equipment and real property management for which the physical inventory observation over property has not been performed Condition While obtaining our understanding of the policies and procedures in place at the Authority’s office in relation to the management of property and equipment, management represented to us that the required physical inventory has not been performed by the Authority’s Property Division personnel during the last seven years as required. Views of Responsible Officials and Corrective Actions This also has been a recurring finding in the last audits. The assigned staff responsible for coordinating the completion of this task are no longer with the Authority. However, during fiscal year 2025-2026, the Human Resources area, as explained last year, conducted an analysis and evaluation of all vacant positions to determine which ones can be hired, but due to current government policies regarding recruiting, the process has been slow. Management is aware of the importance of compliance and is moving forward with corrective action. We are currently in the process of obtaining the required approval to hire additional personnel needed to perform the physical inventory taking, among other tasks. Name(s) of the Contact Person(s) Responsible for Corrective Action Jennifer Medina – Human Resources Director Elena González – DEA Finance Miguel La Torre – Interim Finance Director Anticipated Completion Date During FY-2026-2027

VIEWS OF RESPONSIBLE OFFICIALS The Puerto Rico Department of Education (PRDE) acknowledges the audit finding presented by the auditors regarding equipment and real property management under 2 CFR §200.313. The PRDE conducted a physical inventory of its equipment in December 2025 and issued a new property management policy as a result of this process. The PRDE provides the following clarification for each of the specific deficiencies identified by the auditors: 1. Items with Unassigned Person (Custodian) Not Updated The property records for the items identified in the IDEA Cluster sample (8 items) and the Education Stabilization Fund Programs sample (7 items, plus 1 additional item also missing location information, and 1 item also missing location information with a condition update) were updated in the property system during March 2026 to reflect the correct assigned custodian. 2. Items with Location Not Updated and No Transfer Documentation The property records for the items identified with outdated location information (2 items in the IDEA Cluster sample and 1 item in the Education Stabilization Fund Programs sample) were updated in the property system during March 2026 to reflect the current location of the equipment. 3. Description Discrepancy with Property Observed For the two (2) IDEA Cluster items where the recorded description did not agree with the property observed, the PRDE clarifies that these items were acquired through direct purchases, and the description recorded in the property system was taken directly from the purchase contract (Purchase Order). The detailed equipment description is contained in the notes section of the PO rather than in the main description field, which resulted in the apparent discrepancy. The PRDE will coordinate with the Purchasing Office (Oficina de Compras) to correct the manner in which equipment descriptions from direct purchase contracts are recorded in the property system, to ensure the description field directly reflects the equipment characteristics going forward. 4. Transfer Documentation All transfers associated with the items identified by the auditors as lacking transfer documentation were corrected and properly documented in the property system during March 2026. 5. Assigned Person Reflecting the School Name (RESTART Program) For the twelve (12) RESTART Program items where the assigned person field reflects the name of the school rather than an individual, the PRDE clarifies that these items were assigned to private or non-public schools that are not under the administrative structure of the PRDE and whose personnel do not have a PRDE employee number. Consequently, the name of the school is recorded as the custodian in the absence of an assignable employee identification number. 6. Multiple Air Conditioning Units Under a Single Property Number Regarding the item representing the acquisition of eighty-two (82) air conditioning units recorded under a single property number, the PRDE clarifies that this acquisition corresponds to a central air conditioning system purchased as a single unit composed of multiple components necessary for the system to function as a whole, rather than as eighty-two individually independent units. Accordingly, the equipment was properly catalogued under one property number reflecting the system as a single piece of equipment. 7. Item Not Available for Physical Observation (Custodian on Sick Leave) With respect to the computer/laptop that could not be physically observed because the assigned custodian was on sick leave, the PRDE will validate this item with the responsible personnel once the employee returns from sick leave, and will update the property record accordingly to reflect the physical verification. 8. Equipment in Custody of the Puerto Rico Police Department For the items identified as servers and backup batteries in the custody of a Puerto Rico Police Department official, the PRDE clarifies that the change in custodian was made in the property records in accordance with the terms established under the memorandum of understanding between the PRDE and the Puerto Rico Police Department, which designates the Police Department as the custodial entity responsible for this equipment IMPLEMENTATION DATE Fiscal Year 2025-2026 RESPONSIBLE PERSON Nilda Z. Morales Vázquez Property Office

VIEWS OF RESPONSIBLE OFFICIALS The Puerto Rico Department of Education (PRDE) accepts the finding identified by the auditors regarding the incorrect coding of five (5) reimbursement payments for equipment purchases in account E6170 (Donations and Contributions to Private Entities), rather than in the appropriate E5000-series accounts, and the omission of said assets from the institutional property register. The PRDE has initiated the necessary corrective actions to address this deficiency. Specifically, all assets included within the affected reimbursement transactions have been identified, and a detailed inventory is being prepared in which each asset is classified according to the capitalization criteria established in the Restart Program Fiscal Process Guide (unit cost equal to or greater than $500.00 and useful life greater than two (2) years). This inventory distinguishes between capitalizable equipment (E5000 series) and non-capitalizable equipment (E4414), in accordance with applicable regulatory requirements. Once finalized, the inventory file will be submitted to the PRDE’s Office of Property for review and mass upload into the institutional property register, ensuring that all assets acquired with Restart Program funds are properly recorded under PRDE ownership, in compliance with Section 102(h)(3) of the 2018 Hurricane Relief Act and the requirements of 2 CFR §200.302(b)(3)(4). IMPLEMENTATION DATE Fiscal Year 2026-2027 RESPONSIBLE PERSON Edgar Delgado Serrano Interim Director of Federal Affairs Office

Finding 2025-006: Equipment and Real Property Management Airport Improvement Program View of responsible officials: The City agrees with the finding. Corrective action plan: The City will maintain property records for equipment acquired with federal funds that include, among other elements, the source of funding and the percentage of federal participation. The fixed asset ledger will be updated to distinguish assets acquired with federal award funds from assets acquired with other funding sources. Implementation dates: September 30, 2026 Responsible person: Lola Ogunremi, Chief Financial Officer

2025-002 Equipment Management Cluster: Research and Development Sponsoring Agency: All research and development cluster sponsoring agencies Award Names: All research and development cluster awards Award Numbers: All research and development cluster awards Assistance Listing Title: All research and development cluster assistance listing titles Assistance Listing Number: All research and development cluster assistance listing numbers Award Year: 2024-2025 Pass-through entity: All research and development cluster pass-through entities This is a repeat finding of 2024-004 and 2022-001 and in the prior year corrective action plan we had anticipated correcting this matter by June 30, 2025. Management agrees with the finding related to equipment management. Management conducted a biannual physical inventory count of specific federally purchased research equipment in Fiscal Year 2024, however the complete population of equipment funded with federal research and development dollars were not inspected. By September 30, 2025, the Dartmouth Health system created a federal equipment tracking procedure, and updated property records to include details required by 2 CFR section 200.313. Management will perform a full physical inventory of research equipment for the year ending September 30, 2026 and update the clinical inventory database to reflect the results of the inventory to be able to remediate the finding. Individual Responsible: John Muhlen, System Vice President of Corporate Finance Anticipated Completion Date: September 30, 2026

Views of Responsible Officials: Management respectfully acknowledges the auditors’ observation regarding the reconciliation of the fixed asset schedule to the BarCloud inventory management system. However, management disagrees with the classification of this matter as a Significant Deficiency and wishes to provide the following context for the record. Throughout the close of fiscal year 2025, management dedicated substantial time and resources to a comprehensive review and reconciliation of the Organization’s fixed asset records. This was a deliberate, proactive initiative undertaken by the finance and accounting team to identify and resolve historical discrepancies between the accounting system and BarCloud, enhance the quality and completeness of asset-level records, and establish a stronger foundation for ongoing compliance with 2 CFR 200.313(d). The discrepancies noted by the auditors were, in large part, the very items identified and addressed through this reconciliation effort—not indicators of a systemic or ongoing control failure.As part of this undertaking, management initiated a comprehensive effort to migrate all equipment records from legacy, manual binder-based files maintained at field offices to a centralized online BarCloud system. This effort is now substantially complete. Because a number of these binders were maintained at MBN’s overseas bureaus, obtaining timely access to the physical records presented logistical challenges that required additional coordination and time to resolve. To support this work, MBN engaged local vendors in each country where equipment records were maintained to perform additional inventory review and reconciliation, as well as independent professionals to assess the fair market value of equipment identified for disposition and to perform the required data sanitization of IT equipment in accordance with 2 CFR 200. As a result of this work, the Organization now maintains materially clean and reconciled fixed asset records. The condition observed during audit testing reflects the state of records prior to the completion of management’s remediation efforts, not the current state of the Organization’s controls. Management believes that the effort expended to bring the records into alignment, and the improved control environment that now exists as a result, should be considered in the assessment of severity. Accordingly, management does not believe that the remaining matters, in the context of the substantial remediation completed, rise to the level of a Significant Deficiency. Management agrees with the auditors’ recommendation to continue formalizing procedures for ongoing reconciliation between the accounting records and BarCloud. Management is committed to establishing a common asset identification methodology, implementing a periodic reconciliation schedule, and maintaining supporting documentation to evidence the process going forward. We appreciate the auditors’ recognition of the significant undertaking completed during fiscal year 2025 and remain committed to maintaining full compliance with Federal equipment management requirements under 2 CFR 200.313(d) and 2 CFR 200.303.

The Office of the Chief Financial Officer/Office of Finance and Treasury (OCFO/OFT) for Department of Human Services (DHS) concurs with this finding. Quarterly UPO internal audits and Quarterly Regis audits will continue to assist in identifying areas of noncompliance and improvement. In addition, the EBT Manager and Supervisors will implement enhanced review and validation procedures of daily card production documentation, including targeted quality checks and supervisory oversight, to ensure alignment with established requirements. Employees will be held accountable for performing in accordance with documented procedures, and corrective actions will be applied as needed to address gaps. These efforts are intended to improve consistency, reduce risk, and ensure sustained compliance with program requirements.

PLANNED CORRECTIVE ACTION The Division will communicate to all units conducting USDA Foods inventory counts the requirement that inventory reports must include documented evidence of review prior to submission. The Division's Social Services department will incorporate verification of documented inventory review into its quarterly internal oversight process to ensure compliance with this requirement on an ongoing basis. ANTICIPATED COMPLETION DATE 10/1/26 RESPONSIBLE CONTACT PERSON Julie Luft, NW Social Services Director

The Division is in the process of designing and implementing a precise control to ensure that the inventory reports are reviewed prior to being submitted to the grantor and that the backup documentation is maintained. Anticipated Completion Date: 9/30/2026 Responsible Contact Person: Michael Zielinski, Major, Divisional Commander.

Finding 2025-057 Airport Improvement Program, Infrastructure Investment and Jobs Act Programs, and COVID-19 Airports Programs, ALN 20.106 Management Views MDOT agrees that policies and procedures should be implemented to ensure that equipment and real property purchased with federal funds is properly tracked, recorded, and safeguarded. Planned Corrective Action MDOT will work with the Federal Aviation Administration to address variances between the Uniform Guidance requirements and program guidance so that policies and procedures can be updated as necessary. Anticipated Completion Date September 30, 2026 Responsible Individual(s) Bryan Budds, MDOT

Corrective Action Plan Finding No.: 2025 - 005 Condition: ECHO did not maintain a listing of capital equipment acquired with Federal funds. During testing of equipment purchased under the Education Stabilization Program, we noted that management was unable to provide a complete inventory identifying equipment purchased with Federal awards or documenting the information required by the Uniform Guidance. As a result, ECHO could not demonstrate that equipment acquired with Federal funds was properly tracked and monitored. Plan: ECHO will establish procedures to record and maintain an inventory of capital equipment acquired with Federal and non-federal grant funds. The inventory lists will be maintained by the Director of Finance and Operations. Anticipated Date of Completion: June 30, 2026 Name of Contact Person: Dr. Rena Whitten, Superintendent

The Superintendent, Corporation Treasure, Director of Grants, and the Director of Facilities and or/ Director of Technology will monitor equipment purchases larger than $5,000. Once the purchase is made, the Director of Facilities and or/ Director of Technology will tag the equipment and notify the Director of Grants, Treasurer, and Superintendent when the fixed asset inventory is completed and updated.

Classification Significant Deficiency Responsible Official Chief Financial Officer Anticipated Completion Date June 30, 2027 Management Response Management concurs with the finding. OIC experienced turnover in key finance positions, delayed year-end close activities, and documentation challenges during the auditor transition; management will strengthen close, documentation, and audit readiness controls. Corrective Action Plan 1. Implement a documented monthly and year-end close process with defined deadlines, assigned responsibilities, balance sheet reconciliations, and documented supervisory review. 2. Maintain audit-ready support for material balances, including fixed assets, leases, beginning balances, federal awards, and other significant accounts in a centralized electronic repository. 3. Develop personnel and auditor transition procedures, including desk procedures, PBC checklists, training, and quarterly status reporting to the Finance Committee and Audit Committee.