Corrective Action Plans

Finding 2025-001 Name of Responsible Individual: Noemi Sarrion, Director of Financial Aid Corrective Action Plan: Management agrees with the finding that the estimated Cost of Attendance (COA) for the summer term was calculated incorrectly for five students. Because the summer term includes multiple sessions, the COA multi-step programming process in PowerFAIDS, the College’s financial aid management software, including the review of COA selection metrics, are manual. In April 2025, the College migrated its ERP software and PowerFAIDS to cloud-based platforms. This transaction required significant time from Office of Financial Aid (OFA) staff to test system functionality and validate migrated data to ensure a smooth go-live. As these efforts coincided with summer COA programming, the capacity for thorough review and comprehensive functional testing of summer COA setup was reduced. Going forward, the OFA will assign a staff member, separate from the individual handling COA programming, to review the COA selection metrics. In addition, the OFA will evaluate the potential of automating COA programming processes. Anticipated Completion Date: May 1, 2026

Federal Award - Finding Number: 2025-002 Responsible Person: Director of Finance Condition: The district charged to the food service fund the cost of an asset that was not included on the approved equipment list from Michigan Department of Education and did not obtain approval from Michigan Department of Education prior to purchase. Corrective Action Plan: All food service fund asset purchases made going forward will be compared to the approved equipment list or approved by the Michigan Department of Education prior to purchase. Anticipated Correction Date: Immediate and Ongoing

Finding 2025-001 Federal assistance listing number and name: 10.415 Rural Rent Housing Loans Awards numbers and years: 2025 Federal agency: United States Department of Agriculture Compliance Requirement: Activities allowed or unallowed, allowable costs/ cash management, eligibility, equipment, period of performance, procurement, program income, reporting, special tests Questioned Costs: None Name of contact person and title: Pat Bishop, President Condition and Context: The auditee did not submit the required audit reports to the Federal Audit Clearinghouse (FAC) and Rural Development (RD) in a timely manner. Specifically:  The 2023 Audit Report was not submitted to the FAC as required under 2 CFR Part 200, Subpart F.  The 2024 Audit Report was submitted past the regulatory deadline to both the FAC and RD. Management Response: Management plans to develop and implement an internal audit compliance calendar with clearly defined submission deadlines for all audit-related deliverables, including due dates for the FAC and RD and Create an internal checklist and sign-off process to confirm that each audit deliverable has been submitted to all required agencies and portals. Status: In progress Anticipated Completion Date: Estimated 2025

Management will review its finance infrastructure and the related cost/benefit of hiring additional staff with the required expertise.

The Agency acknowledges this error and agrees with the recommendations. The Agency provides the additional context that the referenced actions took place in 2020, more than four years before the current audit period. This issue is not reflective of CASI's current internal control environment and does not represent an active or ongoing failure. This was an isolated instance resulting from the actions of a previous administration, whose financial and compliance oversight practices have since been fully overhauled.Since then, CASI has undergone significant changes in staff and Board leadership, financial controls, and Head Start compliance procedures, which directly mitigate any recurrence of this issue. The current leadership bas self-disclosed the issue and is actively working to resolve it. This matter was voluntarily identified and disclosed by current leadership to both the auditors and the Head Start Regional Office. Efforts are ongoing to correct the SF-429 and properly record a Notice of Federal Interest in collaboration with OHS, despite delays resulting from the broader federal restructuring of the Head Start regional offices.

Finding 2025-003: Community Development Block Grants Equipment Procedures Type of Finding: Both Compliance and Control U.S. Department of Housing and Urban Development Pass-through Entity: Michigan Strategic Fund Assistance Listing Number: 14.228 Award Numbers: MSC 22003-PGS and MSC-221009-WRI Award Year Ends: November 30, 2024, and December 31, 2024 Recommendation: The Village should establish procedures to require the maintenance of detailed fixed asset records that include all specified elements. In addition, the Village should perform a physical inventory of the property and reconcile the results with fixed asset records at least once every two years to help prevent loss, damage, or theft of the property. Action Taken: The Village will establish a standard operating procedure that requires the maintenance of detailed asset records and the performance of a documented physical inventory of the assets acquired with federal funds on an annual basis. Responsible Person and Anticipated Completion Date: The Village Clerk/Treasurer will oversee the implementation of this plan by February 28, 2026.

Audit Finding 2025-001: The regulatory agreement stipulates that all withdrawals exceeding $2,500 from the Reserve for Replacement Account need prior written consent of the lender. Several withdrawals totaling $108,111 for emergency repairs and improvements, to cover payroll, pay audit fees and for other operating expenses were made from the Reserve for Replacement account without prior approval from the lender. Response: Management agrees with the finding, was aware of the requirement for prior approval and on April 30, 2025, and has obtained retroactive approval from the lender for the withdrawal of 108,111.

Statement of condition 2025-001: During the year ended March 31, 2025, management submitted a 9250 to withdraw funds from the reserve for replacements fund that included the same invoice as a previously approved 9250. The reserve for replacements account was not reimbursed for the duplicate withdrawal. Comments on the finding and each recommendation: Management should transfer $14,376 from the operating cash account to the reserve for replacements account. Action(s) taken or planned on the finding: Management concurs with the finding and recommendation. On May 29, 2025, management transferred $14,376 from the operating cash account to the reserve for replacements account.

Finding Reference Number: 2024‐002 Description of Finding: During the audit of capital assets, it was noted that the Town did not establish a complete reconciliation process between (1) governmental fund capital outlay postings, (2) government-wide fixed-asset adjustments, and (3) the detailed construction in progress and capital assets tracking schedules. Statement of Concurrence or Nonconcurrence: Capital Assets had adjustments. Corrective Action: The audit period occurred during a significant organizational transition. Much of the Finance team was newly hired, and the department was operating without full historical knowledge of several complex, multi-year capital projects. At the same time, the Town was implementing a new account structure and adapting to revised financial coding practices. These overlapping changes created temporary gaps in continuity, processing, and reconciliation workflows as staff worked to integrate new systems while learning inherited project histories. The Town will implement a formalized, multi-layer reconciliation process that ensures capital activity is consistently captured, reviewed, and aligned across all reporting levels. Actions include: • Establishing standardized quarterly and year-end reconciliation procedures linking capital outlay expenditures, fixed-asset journal entries, and construction-in-progress schedules. • Updating internal workflows to ensure all capital project costs are reviewed, reconciled, and recorded in the asset management system in a timely manner. • Developing crosswalk worksheets that map fund-level postings to government-wide adjustments and detailed project schedules. • Reconciling Finance’s capital activity and CIP summaries with Public Works’ projecttracking reports as a required secondary review to validate accuracy, confirm project status, and ensure costs are aligned across departments. • Providing additional training to staff responsible for capital asset accounting to strengthen understanding of GASB reporting requirements and reconciliation expectations. • Engaging outside consultants, as needed, to assist with initial setup, staff training, and quality-assurance reviews during the transition. Name of Contact Person: Aimee Beleu, Finance Director, (530) 872-6291, abeleu@townofparadise.com Projected Completion Date: March 1, 2026

Finding Number: 2024-036 Audit Type: Single Audit Finding Title: Deficiencies in Equipment and Real Property Management Related Finding: 2024-021 (Yellow Book) 1. Contact Person Responsible for Corrective Action Name: Shannah Weaver Title: City Clerk Department: Finance Department 2. Planned Corrective Action The City will implement a centralized inventory tracking system and conduct annual reconciliations to ensure compliance with federal property management standards. 3. Anticipated Completion Date June 30, 2026 - plan already in place 4. Management1s Response Management concurs with the finding and will ensure staff are trained on property management procedures. 5. Status of Prior Year Finding This is a new finding.

Abrupt change in management caused a lapse in organizational knowledge, but new leadership has taken the proper steps to be audit-ready. The inventory management position has now been filled.

Finding #2024-001 – Equipment and Real Property Management Description of Finding: As a recipient of a direct federal award under the Water and Waste Disposal Systems for Rural Communities (ALN 10.760) program, the Town is required to comply with mandatory compliance requirements. Per the OMB Compliance Supplement, one requirement that recipients are expected to comply with pertains to Equipment and Real Property Management. The Town does not maintain a separate schedule identifying all equipment purchased with federal funds. Contact Person: Karey Miner, Town Administrator Statement of Concurrence or Nonconcurrence: Concurrence Planned Correction Action: Going forward, the Town of Winchester will carefully review all documents pertaining to any federal funds granted. We will also keep a record of all purchases made from federal funds by creating an inventory worksheet and submitting our capital assets. Any items sold would be logged and have complete documentation of the sale. Anticipated Completion Date: Completion is anticipated for the June 30, 2025 financial reporting.

2024-002 Head Start Cluster Reporting Noncompliance - SF 429 Recommendation: We recommend the Committee establish sufficient controls to ensure that required reports are completed and submitted in a timely manner to remain in compliance with grant requirements. Action Taken: The agency In planning our performance to report the SF 429's accurately and efficiency we have engaged in T & TA Training and worked closely with a consulting firm recommended by the office of Head Start. During this time, we have established a process that is completed by the Director of Facilities, and the 429 reports are completed and reported now before November 30th due date annually. The training has ensured the agency of an effective internal control process. Please also note we are current as of this statement.

Management does not concur with the finding. The cases identified were processed in accordance with the policies, guidelines, and procedures established by the Recipient (PRDOH) and were reviewed at each stage of the grant process, including award, disbursement, and closeout. All determinations were made following the internal controls, Program Guidelines, and systems established by the Recipient. The observations noted do not represent noncompliance by the Bank but, in some cases, reflect situations inherent to the grant management systems, which are administered directly by the Recipient and its consultants.

Management’s Response : AOMC acknowledges that notices of federal interest were not filed for equipment purchases over $100,000 as required by the grant agreement. AOMC is currently working with the grantors to file the appropriate notices of federal interest for all applicable equipment. In addition, AOMC is updating its internal policies to clearly include this requirement so that all future purchases meeting this threshold are properly documented and compliant with grant guidelines.

Management’s Response and Corrective Action Plan: MLSC management acknowledges the finding and concurs in part. MLSC has an established Fixed Asset and Physical Inventory Policy in accordance with LSC Financial Guide § 3.6.2. The policy requires that a complete physical inventory be conducted at least once every two years, and MLSC has been performing these inventories regularly. However, management recognizes that the documentation of the most recent physical inventory was incomplete, specifically lacking the signatures, dates, and reconciliation notes required to demonstrate full compliance. Responsible person: Chief Fiscal Officer, Jocelyn Mallari Corrective action planned: To address this issue and ensure full adherence to the policy, MLSC, with the supervision of the Chief Fiscal Officer continued the implementation of Physical Inventory Procedures requiring a full physical inventory every two years, including proper documentation and reconciliation with the subsidiary ledger. To improve documentation, the Chief Fiscal Officer will conduct training to ensure that each future physical inventory count includes the date of the count, signature of personnel conducting the inventory, a witness and management reviewer, reconciliation records, and authorization and documentation for any write-offs or disposals. Anticipated completion date: June 30, 2026.

Management’s Response and Corrective Action Plan: MLSC management acknowledges the finding and concurs in part. MLSC has an established Fixed Asset and Capitalization Policy in accordance with LSC Financial Guide § 3.6.1, which includes maintaining a detailed subsidiary ledger and lapsing (depreciation) schedule. During the audit, the lapsing schedule was provided to the auditors upon request. However, the master fixed asset record (which includes itemized property details, funding source, and location) was not submitted because it was not requested during the audit process. Responsible person: Chief Fiscal Officer, Jocelyn Mallari Corrective action planned: To further ensure full compliance and to strengthen documentation and transparency, MSLC, with the supervision of the Chief Fiscal Officer, MLSC continues to enforce the existing Fixed Asset and Capitalization Policy and ensures that all property records are maintained in accordance with LSC Financial Guide 3.6.1. MLSC ensures to conduct periodic internal review of fixed assets registry and continues to maintain these records and made them readily available and provided to auditors, even if not specifically requested. Anticipated completion date: Completed.

Management’s Response and Corrective Action Plan: MLSC acknowledges the finding and concurs with the auditor’s recommendation. Management is committed to maintaining accurate, timely, and reliable financial reporting in accordance with Government Auditing Standards and the LSC Financial Guide. Responsible person: Exec. Director, Lee Pliscou Corrective action planned: MLSC currently has a Financial Management and Internal Control Policy. This policy is strictly being enforced and fully implemented to ensure compliance with both the LSC Financial Guide and Government Auditing Standards. • MLSC has established a financial oversight and audit committee, and identifies the duties of the committee in writings. • The financial oversight and audit committee is required to review quarterly the management report prepared by the Chief Fiscal Officer. • The Chief Fiscal Officer will review and reconcile the subsidiary ledger after the month-end close and before the submission of monthly report to the Board of Directors. • To ensure that internal controls are strengthened and that future financial statements are properly prepared, the Chief Fiscal Officer will conduct an annual training with all accounting staff on reconciliation procedures before the year-end close. Anticipated completion date: Dec. 31, 2026

Views of Responsible Officials and Planned Corrective Action: The Designees of the Grants Monitoring and Compliance team will oversee the completion of a physical inventory of all equipment that exceed $5,000 by October 31, 2026. The Grants team will also house documentation.

Views of Responsible Officials and Planned Corrective Actions: Management agrees with this finding. Corrective Action: Fair Haven has internal records with tracking assets but will ensure that all qualifying capital asset purchases are properly capitalized and recorded on the balance sheet in accordance with GAAP and added to the fixed asset register. Management will review significant purchases at acquisitions to confirm proper treatment going forward.

CONDITION: The Regional Office of Education No. 39 manually maintains and stores its inventory of property and equipment. Asset details in the property records include only the description of the property, manufacturer’s serial number or other identification number, source of funds, who holds title, acquisition date, and cost of the property. The other minimum requirements specified by the Code including FAIN, location, use and condition of the property are not included in the property records. PLAN: The Regional Office of Education No. 39 created a combined inventory documents to provide a complete detailed accounting of all property and equipment which provided majority of the required information for federal funds as well as a reconciliation to the capital outlay disclosures within the financial statements. The missing data requirements for the compliance with record keeping of Equipment from Federal funds will be added for Fiscal Year 2025. ANTICIPATED DATE OF COMPLETION: Implemented August 2025

Finding 2024-003 Information on the federal program: Subject: Water and Waste Disposal Systems for Rural Communities – Equipment and Real Property Management Federal Agency: U.S. Department of Agriculture Assistance Listing Number: 10.760 Federal Award Number: N/A Pass-Through Entity: N/A Compliance Requirements: Equipment and Real Property Management Audit Finding: Material Weakness, Noncompliance Condition: An effective internal control system was not in place at the District to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. Context: The District did not maintain an updated asset listing that reflects the construction in process balance related to the project funded with federal funds. There was approximately $25.0 million of disbursements from federal funds related to the project as of December 31, 2024. Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: The third-party accounting firm will compile a capital asset listing that lists out the District’s capital assets and notes the required information, which will include the federal funding source (if applicable). The capital asset listing will be updated on an annual basis. The Board of Directors will review the capital asset listing. Responsible Party and Timeline for Completion: The third-party accounting firm and the Board of Directors will implement the corrective action plan, which will go into effect immediately.

VIEWS OF RESPONSIBLE OFFICIALS Management agrees with the finding and has initiated corrective actions to address each of the issues identified by the auditors. The Department of Education of Puerto Rico (PRDE) recognizes the importance of maintaining an accurate and up-to-date property inventory in accordance with federal regulations under 2 CFR §200.313(d), and is implementing measures to strengthen controls, ensure proper tagging, and monitor the location, use, and condition of all federally funded equipment. The Property Office has initiated a complete physical inventory to reconcile the existing property records with actual assets. All equipment custodians will be required to verify and certify their assigned inventory to ensure records are accurate and reflect current locations and responsible personnel. For deficiencies identified for the IDEA Cluster: Condition 1: For the item describing a three-person sectional sofa, which upon inspection corresponded to a five-burner stove, the Property Office corrected the equipment tag to ensure identification of both items. The correction was made directly on the physical assets to properly reflected the correct property numbers and descriptions. Condition 2: The item identified as not observed corresponds to software licenses that were distributed to teachers for instructional use. The Property Office maintains a detailed record identifying the licenses purchased, the specific equipment on which each license was installed, and the corresponding custodian. For deficiencies identified for the Education Stabilization Fund Programs: Condition 1: For the items that could not be observed during the auditors’ site visits, the Property Office will perform a follow-up investigation with the corresponding school to locate the equipment. Condition 2: The school where the air-conditioning unit is located has experienced electrical voltage issues, which have delayed its installation to prevent potential damage to the equipment. The situation is being addressed in coordination with the school’s maintenance team to correct the electrical problem. Once resolved, the PRDE will proceed with the installation. In parallel, the property office will consult with the corresponding federal program to evaluate the possibility of relocating the unit to another school where the equipment is needed and can be safely installed and used. Condition 3: This type of equipment is kept in the warehouse until a specific need is identified in a school facility. Once a school requests or is identified as requiring the equipment, the Property Office initiates the corresponding transfer, and the movement is duly documented and updated in the property management system.. this process ensures that equipment is allocated efficiently based on program needs and that all transfers are properly supported with documentation. Condition 4: The hydroponic nursery will be relocated to a school where it can be properly utilized for educational purposes. The Property Office, in coordination with the corresponding program, will verify the current condition of the equipment and perform the necessary repairs or adjustments to ensure it is fully functional and in use as intended. Condition 5: The Property Office has already identified a new school to which the Apple computer will be transferred to ensure it is properly utilized for educational purposes. The transfer will be completed om coordination with the corresponding program, and the property records will be updated accordingly to reflect the new location and custodian of the equipment. The PRDE is committed to correcting all deficiencies noted in the finding. All actions described above will be documented and reported as part of the corrective action plan, with an expected completion timeline within fiscal year 2025. These measures will ensure compliance with the Uniform Guidance and strengthen the overall management and safeguarding of federally funded property and equipment. IMPLEMENTATION DATE In process. RESPONSIBLE PERSON Nilda Z. Morales Vazquez Property Office Director

VIEWS OF RESPONSIBLE OFFICIALS The PRDE does not agree with the recommendation to revise the Restart Fiscal Process Guide to require private schools to submit a receiving report or equivalent documentation to substantiate equipment purchases prior to reimbursement. These transactions correspond to reimbursements, not direct purchases made by PRDE; therefore, verification is performed through proof of payment submitted by the schools. When auditors requested confirmation of receipt, PRDE obtained photographs of the equipment from the schools to provide additional verification that the items were in the school. In addition, the PRDE wants to clarify that where quotations were used instead of invoices, the private schools provided valid proof of payment that matched the quotations submitted. This evidence demonstrated that the purchases were completed and consistent with the approved documentation, meeting the requirements for allowable and verifiable costs under Federal regulations. The PRDE does not agree with the recommendation to change the accounting classification or to implement additional review procedures related to the use of account E6170, “Donations and Contributions to Private Entities.” The use of account E6170 is appropriate given the nature of the transaction, which reflects a reimbursement to a private school rather than a direct purchase by PRDE that would otherwise be recorded under account E5500. The PRDE acknowledges the deficiencies noted during the audit regarding the omission of reimbursed equipment purchases from the PRDE Property and Equipment Register. To address this, the PRDE has prepared a list of reimbursed equipment purchased by private schools under the Restart Program. This list will be provided to the personnel responsible for maintaining the register to ensure the inclusion of these items in the Property and Equipment Register, in compliance with the capitalization and accountability requirements established in the Restart Fiscal Process Guide. The corrective action is scheduled for implementation on or before the end of the current fiscal year. Auditor Comment on Management Response for Finding No. 2024-003 In relation to situation #2 comments, the PRDE didn’t have evidence of the receiving report, which is required for all other purchases of equipment for which the PRDE is the owner. Internal controls over property and equipment should be the same for all equipment for which the PRDE is the owner. In relation to situation #3, all equipment purchased and registered in this account was not included in the inventory of the PRDE, because the general ledger account used is not recognized for purchase of property and equipment, instead is a general ledger account for donations. Further, in accordance with the “Guia de Procesos Fiscales – Fondos Programa Restart”, it is established that all reimbursement of equipment should be recorded in accounts E5000 or E4414. This is because the system recognizes that an addition of equipment was made and must be capitalized. IMPLEMENTATION DATE In process. RESPONSIBLE PERSON María de los A. Lizardi Valdés Office of Federal Affairs Director Edgar Delgado Serrano Office of Federal Affairs Associate Director Hamir M. Mojica Mojica Program Coordinator

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. During fiscal year 2025‐2026, the Human Resources area is conducting analysis and evaluation of all accounting vacant positions to determine which ones can be hired. Once this analysis is completed, management will obtain the required approval to hire additional personnel to take care of the physical inventory taking. The position of Property Manager has already been duly filled.