Corrective Action Plans

Finding 2024-001 - Internal Controls Over Accounting and Financial Reporting Fiscal Year Finding Initially Occurred: FY 2024 (Initial Finding) Name of Federal Agency: U. S. Department of Housing and Urban Development (HUD) Award Year: 2021, 2023, and 2024 Criteria or specific requirement: Under the Uniform Guidance (2 CFR Part 200), non-Federal entities that receive Federal awards must maintain an accounting and financial management system that provides adequate internal control, accountability, and reporting. Generally Accepted Accounting Principles (GAAP) require revenues and expenses to be recognized in the period in which they are earned or incurred. Assets, liabilities, and net assets should be accurately recorded and reported as of the applicable reporting date. Organizations should maintain effective controls to ensure proper period-end cutoff and accurate financial reporting. Condition: During our audit, we identified material accounting errors in accounts receivable, equity investments, property and equipment, accumulated depreciation, construction in progress, accounts payable, and the classification of net assets with donor restrictions, where account balances were not recorded, were recorded improperly, or improperly classified. With respect to revenues and expenses, we identified transactions that were recorded in accounting periods other than those in which the underlying economic events occurred. Specifically, some revenues and expenses that should have been reported in the 2023 accounting year were recorded in the 2024 accounting year, Another condition related to this finding is that accounting personnel do not close the books at year-end each year. This condition required SC UpLift's management to engage the services of a third-party Certified Public Accountant (CPA) to correct the underlying accounting records before year-end financial statements could be prepared. The accounting records required approximately 30 adjusting, reclassifying, or correcting journal entries, to get the accounting records ready for financial reporting. Cause of condition: The primary cause of this condition appears to be a lack of skill, knowledge, experience, and training of accounting personnel with respect to GAAP, and governmental bookkeeping, accounting, and financial reporting requirements. A secondary cause of this condition may be a lack of supervisory oversight and review of accounting transactions by a knowledgeable individual. Potential effect of condition: The potential effect of this condition is the possible material misstatement of interim and/or year-end financial reporting. Management may make decisions using inaccurate financial information, which could negatively affect SC Uplift's ability to secure additional funding for its programs. Section II - Financial Statement Findings (continued) Finding 2024-001 - Internal Controls Over Accounting and Financial Reporting (continued) Fiscal Year Finding Initially Occurred: FY 2024 (Initial Finding) Recommendation: We recommend Management strengthen daily accounting, and period-end closing and review procedures to ensure all transactions are recorded in the appropriate accounting period. Recommended actions include: 1. Implementing formal cutoff procedures for revenue, expense, asset, and liability transactions; 2. Strengthening supervisory review and approval of period-end journal entries and reconciliations; 3. Performing timely reconciliations of significant balance sheet accounts; 4. Providing training to accounting personnel regarding period recognition requirements and accounting cutoff principles; and 5. Establishing documented review controls to verify the completeness and accuracy of period-end financial reporting. Response of Responsible SC UpLift Official: Management of SC UpLift Community Outreach, Inc. acknowledges and understands the audit finding regarding financial reporting and year-end accounting procedures. We appreciate the auditor's recommendations and are committed to strengthening our accounting and financial reporting processes to ensure continued compliance with Generally Accepted Accounting Principles (GAAP), Uniform Guidance (2 CFR Part 200), and nonprofit financial reporting standards. As a small nonprofit organization with limited administrative resources, SC UpLift has consistently sought to maintain sound financial management practices by engaging qualified Certified Public Accountants (CPAs) to assist with our accounting and financial reporting. However, due to the financial constraints common among small nonprofit organizations, we have not always been able to retain those services on a continuous basis because of the associated costs. This was SC UpLift's first Single Audit, and we recognize that the increased reporting requirements associated with federal funding require additional expertise, stronger internal controls, and more formalized year-end closing procedures. We have already engaged a third-party CPA to assist with the preparation of the 2024 audited financial statements and will continue working closely with both our bookkeeper and CPA throughout the upcoming fiscal year to improve our financial reporting processes. Specifically, management will: • Develop and implement formal month-end and year-end closing procedures. • Perform timely reconciliations of all significant balance sheet accounts. • Strengthen supervisory review of journal entries, reconciliations, and financial reports. • Ensure revenues, expenses, assets, and liabilities are recorded in the proper accounting period. • Continue utilizing the expertise of our third-party CPA to review financial records, provide guidance on GAAP compliance, and assist with staff training and implementation of best practices. Management believes these corrective actions will significantly strengthen our internal controls over financial reporting and reduce the likelihood of similar findings in future audits. We are committed to continuous improvement and maintaining financial records that accurately reflect the organization's financial position while meeting all applicable federal and nonprofit reporting requirements. Target Completion Date: December 31, 2026

Re: Corrective Action Plan - 2024 Audit To: United States Department of Housing and Urban Development From: Housing Authority of City of Pittsburgh, (HACP) Action: Respectfully submits the following Corrective Action Plan for the year-end December 31,2024. Name and address of independent public accounting firm: Maher Duessel, CPA’s 503 Martindale Street, Suite 600 Pittsburgh, PA 15212 Audit period: January 1, 2024 - December 31, 2024 The findings from the December 31, 2024, Schedule of Findings and Questioned Costs are discussed below. The findings are numbered consistently with the number assigned in the schedule. Finding 2024-001 U.S. Department of Housing and Urban Development Moving to Work Demonstration Program - ALN 14.881 Eligibility and Reporting Repeat Finding from 2021(2021-001), 2022(2022-001), and 2023 (2023-001) Maher Duessel Finding Condition: During our review of 40 tenant files prepared by the Housing Authority of the City of Pittsburgh (Authority) as part of the biennial reexamination process, we noted a lack of functioning internal controls which led to the below exceptions in our testing. We noted four instances where a tenant recertification using the HUD-50058, Family Report (Form) (which provides eligibility and reporting information) was not completed, on a timely basis. We also noted one instance where other documentation to support the reporting and eligibility assessment as part of completion of the HUD-50058 was not provided. This includes items such as support for income calculation and medical deductions. These exceptions indicate a lack of functioning internal controls and oversight to ensure compliance with HUD requirements related to timely and accurate tenant recertifications. HACP Management Response/Action Taken: Action Taken: The HACP will continue to monitor and train staff regarding processes and procedures, to include and not limited to the Housing and Urban Development’s (HUD) hierarchy of income verification. As noted in previous responses, the HACP continues to experience challenges in hiring and retaining staff as a result of the complexity of the Housing Choice Voucher (HCV) Program. In fiscal year (FY) 2024, the HCV Department had a significant turnover in both line and managerial staff. The HACP promoted an aggressive hiring plan to attract new talent to fill vacant positions due to the great resignation that the HACP, along with other national Agencies, continue to experience. In addition, the HACP has adopted the policy of hiring more staff than needed in the event of turnover. The HACP will continue to utilize the Internal Compliance (IC) Department to review recertifications and compile audit report cards based on the accuracy of recertifications reviewed. The audit report cards are used as an additional management tool to determine whether additional training is needed for staff and the department in general. The HACP continues to: • Send notices regarding re-certifications 120 days in advance of the due date, o Send 10-day notices for missing AR documents o Send 30-day notices when there is no or insufficient response to the 10 day notice sent • Require Managers to review reports to assure timely submission of re-certifications, • Utilize the IC Department to review and sample files from the Occupancy and the HCV portfolio, • Offer periodic staff training on re-certification, • Offer participants the use of technology to complete paperwork In addition to the above noted internal controls, the HACP will institute Bob.ai in FY 2026 as an additional tool to notify both the participant and the HACP staff when the recertifications are due and provide notification of missing documents. The One Stop Shop (OSS) is staffed with three (3) full-time staff members to receive information from participants and landlords to provide timely customer service. In July of 2024, the OSS was equipped with computers for the public to access HACP staff virtually. The use of the computers allows staff to interact with participants regarding minor issues without having the staff physically come to the OSS, thus saving time and money for both the external customer and the Authority. The opening of the One Stop Shop has been successful in receiving the public and responding to concerns.

Subject: Compliance with HUD Replacement Reserve Monthly Deposit Requirement Issue Identified: HUD regulations require that deposits into the Replacement Reserve account be made on a monthly basis. Our agency has historically made annual lump-sum deposits, which is not in compliance with HUD guidelines. Corrective Actions 1. Change in Deposit Frequency Action: Transition from an annual deposit schedule to a monthly deposit schedule in accordance with HUD requirements. Responsible Party: CFO and Accounting Manager Timeline: Effective May 1, 2025, monthly deposits will begin. Verification: Monthly entries and bank confirmations will be reviewed by Accounting. 2. Implementation of Automated Transfers Action: Establish and schedule automated monthly bank transfers to the Replacement Reserve account. Responsible Party: Accounting Manager in collaboration with Banking Institution Timeline: Setup completed by 04/15/2025. First automated transfer on 05/01/2025. Verification: Confirmation of automation setup from the bank and successful execution of first transfer. 3. Monthly Notifications to Fiscal Personnel Action: Create an automated monthly email notification system to alert key fiscal personnel of each deposit, including the amount and confirmation of receipt. Responsible Party: Budget & Reimbursement Manager Timeline: Notification system live by 05/01/2025. Verification: Email log confirming monthly communications sent to fiscal team. Ongoing Monitoring and Compliance The Accounting Manager will review monthly bank statements to verify timely and accurate deposits. The Controller will incorporate verification into monthly closing procedures.

Contact Person – Matt Bakke, Executive Director Corrective Action Plan – The Project will review its policies and procedures over selection from waiting list. Completion Date – 12/31/26

Contact Person – Matt Bakke, Executive Director Corrective Action Plan – The Project will review its policies and procedures over monthly reconciliations. Completion Date – 12/31/26

Finding #2024-002 Section 202 Supportive Housing for the Elderly – (Capital Advance); ALN 14.157: Recommendation: We recommend that management implement procedures to ensure that required funds are deposited into the residual receipts reserve account in the future within the 60-day requirement. Action taken: Smokey Hollow Apartments agrees with the auditor’s recommendations and will implement procedures to ensure timely and accurate deposits in the future. For questions regarding this corrective action plan, please contact John Lutz, Vice President of Financial Strategy, at (315) 424-1821.

Contact Person – Matt Bakke, Executive Director Corrective Action Plan – The Project will implement formal procedures requiring documentation evidencing the completion of periodic reviews. Completion Date – 12/31/26

Contact Person – Matt Bakke, Executive Director Corrective Action Plan – The Project will review its policies and procedures over timely reporting of report submissions. Completion Date – 12/31/26

Contact Person – Matt Bakke, Executive Director Corrective Action Plan – The Project will review its policies and procedures over selection from waiting list. Completion Date – 12/31/26

Contact Person – Matt Bakke, Executive Director Corrective Action Plan – The Project will review its policies and procedures over timely reporting submissions. Completion Date – 12/31/26

MCHA has created policies to address this issue and staff have received training on how to follow it. The 2025 unaudited submission was filed in a timely manner.

MCHA has hired an independent HR consultant to review all personnel files and procedures and provide guidelines to ensure that supporting documentation exists for all payroll expenses. Additionally, new systems have been put into place with three layers of checks and balances to ensure that timesheets match expenses. Policy has been set by board to ensure any bonuses or additional payments are board approved and no additional payments will be issued without board signature. MCHA has established allocation percentages for payroll and indirect costs in relation to units and/or time spent. All costs will be allocated on this basis. Allocations will be reviewed and updated annually and/or as changes are necessitated.

2024-011 Timely Grant Draws Material Weakness Recommendation: The Housing Authority should adopt written grant draw policies into its financial policies and procedures manual. Financials should be reviewed monthly, and drawdowns made as needed. Action Taken: The Housing Authority agrees with this finding and will implement this recommendation within 120 days of this audit report.

2024-008 Character Investigations Recommendation: Adopt and implement policies over the performance of character investigations, the filing of character investigations and the criteria to be used to preclude the hiring of individuals for certain positions. Action Taken: The Housing Authority agrees with this finding and will implement this recommendation within 120 days of this audit report.

2024-007 Tenant Eligibility Material Weakness Recommendation: In general, we continue to recommend a review of the re-certification process to determine areas of weakness. Specifically, we recommend the use of a standard checklist in the re-certification process. We further recommend that each re-certification clerk’s work be routinely audited. We also recommend more standardization in resident files organization of information, and procedures established to make sure all files are maintained adequately in order to be compliant. Action Taken: The Housing Authority agrees with this finding and will implement this recommendation within 120 days of this audit report.

Condition: Controls were not designed or implemented effectively to ensure: 1. Mortgage and escrow payments were made in accordance with the due dates and amounts specified in the executed mortgage note agreement. 2. Earnings are retained in the replacement reserve account 3. The organization completes the required financial reports in accordance with the applicable accounting basis, supported by underlying records representing the activity for the period reported. Planned Corrective Action: Management will design and implement internal controls to ensure compliance with mortgage escrow payments, reserve account funding, and quarterly financial reporting requirements, including a process to ensure that documentation of reviews is retained. Contact person responsible for corrective action: Louise Arzu, Vice President, Finance Anticipated Completion Date: 9/30/2026

Condition: The Organization did not submit the budget to HUD within 30 days of the start of its fiscal year. Planned Corrective Action: Management has implemented a new review and oversight process related to the process for the budget submissions in question to ensure timely submission on a go-forward basis. Contact person responsible for corrective action: Louise Arzu, Vice President, Finance Anticipated Completion Date: 9/30/2026

Management has updated the policies and procedures manual to address this finding. For each housing unit, we are using the Department of Housing and Urban Development (HUB) rent reasonableness form at lease signing. This form will be updated annually for each unit. We will also be following the HUD fair market rent determinations.

Finding Number 2024-005 Subject Heading (Financial) or AL no. and program name (Federal) 93.767 Children’s Health Insurance Program 93.778 Medicaid Cluster Planned Corrective Action OKDHS Response: We are using Azure DevOps to track the work related to the findings for the mentioned issues. The work is being completed under User Story 455612 - PS2 | AFS | Notices | Update Medical Notices Language for CMS Audit Finding Corrective Action (2024-005). To ensure all required notice language updates are implemented accurately and consistently, OKDHS is currently utilizing an Azure DevOps tracking tool to conduct a thorough discovery and analysis of all aspects of this issue. Our primary focus is identifying every notice and process that may be impacted by this change. OHCA Response: Additional post-CAP audits will be conducted by Member Audits upon notification from OHS all corrective measures have been implemented, should occur after August 1, 2026. Anticipated Completion Date August 1, 2026 Responsible Contact Person Chris Dees, Eligibility and Coverage Services Technical Director; April Anonsen, Deputy State Medicaid Director; Aubrey McDonald, OKDHS Medicaid Program Administrator; Tana Parrott, OHCA Director of Member Audits; Kristin Edwards OHCA Senior Director of Program & Accountability

Finding Number 2024-013 Subject Heading (Financial) or AL no. and program name (Federal) AL #84.010 TITLE I, PART A – GRANTS TO LOCAL EDUCATIONAL AGENCIES Planned Corrective Action OSDE acknowledges the audit finding. During the FY24 audit period, monitoring procedures for LEA Supplement Not Supplant (SNS) methodologies were identified as lacking adequate documentation and verification measures. On July 25, 2024, OSDE submitted corrective action plans to USDE, which included revisions to the ESEA Resource Toolkit, Title I Handbook, and GMS review protocols. As of April 11, 2025, USDE determined that the SNS requirements have been satisfied and confirmed that OSDE’s revised resources are consistent with federal guidance. OSDE has subsequently strengthened internal controls and improved monitoring procedures to ensure ongoing compliance of LEA SNS methodologies and supporting documentation. Anticipated Completion Date Apr-25 Responsible Contact Person Tammy Smith

IHC has identified gaps in supporting documentation for credit card charges and has implemented measures to strengthen internal controls. Employees are now required to submit all receipts within two business days of the charge being processed. In addition, individuals who fail to submit proper documentation may be held directly accountable for the charge. Monthly internal audits have been instituted to review all credit card transactions for compliance, and receipts ar now collected and verified according to established timelines. These measures ensure that all credit card activity is properly documented, monitored, and compliant with agency policies moving forward.

IHC continues to strengthen its internal processes to reduce delinquent recertifications, guided by a board-approved Quality Assurance Plan that includes recurring file reviews, rent calculation checks, and completeness checklists.

The IHC has experienced some major staffing transactions within its Finance Department which have caused delays in the processing of cash disbursements to vendors. Since that time, IHC has updated its Internal Control Policy and made changes to the process of paying vendors. IHC has also hired a Sr. Accountant and Accounts Receivable Specialist to ensure the process is followed accurately and timely. IHC's Finance Committee and Fee Accountant's will also provide an additional level of monitoring as we are in constant communication to ensure all current practices are compliant. IHC is confident these changes will correct ths finding moving forward.

IHC has experienced significant staffing transitions within its finance department, which have comtributed to delays in processing cash receipts. In response, IHC has updated its Internal Control Policy and revised its processes. Additional support staff have been hired in the finance department to ensure accurate and timely processing. Furthermore, IHC's Finance Committee and Fee Accountants provide and added layer of checks and balances, maintaining ongoing communication to ensure all practices remain compliant. IHC is confident that these measures will effectively address this issue moving forward.

Type of Finding: Material Weakness in Internal Controls over Compliance- Cash Management Recommendation: We recommend that management ensure that all invoices are reviewed and approved before submission. Explanation of Disagreement with Audit Finding: There is no disagreement with the audit finding. Action taken in response to finding: Management has implemented a policy which requires each drawdown to be reviewed and to be based only on expenses incurred for the period, prohibiting the use of a straight-line calculation to draw down funds. Invoices are also approved by the CFO or CEO prior to submission. Name of the contact person responsible for corrective action: Regan Kelly, CEO of Net Treatment Services, Inc. dba: NET Community Care (215) 451-7000 Planned completion date for corrective action plan: December 31, 2026.