Corrective Action Plans

Finding 1213997 (2024-003)

Material Weakness 2024

City of Pickens

SC

Reporting Internal Control / Segregation of Duties

CONTACT PERSON: Mandy Hess, Finance Director, mhess@pickenscity.com CORRECTIVE ACTION: The City has implemented procedures to ensure that amounts reported for grant reporting amounts are accurate and are consistent with the City’s general ledger. PROPOSED COMPLETION DATE: December 31, 2026

View Audit 400867

Finding 1213933 (2024-001)

Material Weakness 2024

Alliance for Rights and Recovery, Inc.

NY

Subrecipient Monitoring Reporting Internal Control / Segregation of Duties

2024-001 – Data Collection Forms Finding: Our audit procedures noted Alliance for Rights and Recovery, Inc. did not certify or submit the required Data Collection Form for the fiscal year ended December 31, 2023 related to the 2023 Single Audit. As of the date of our 2024 audit, the Data Collection ...

2024-001 – Data Collection Forms Finding: Our audit procedures noted Alliance for Rights and Recovery, Inc. did not certify or submit the required Data Collection Form for the fiscal year ended December 31, 2023 related to the 2023 Single Audit. As of the date of our 2024 audit, the Data Collection Form and accompanying reporting package remain unsubmitted. Recommendation: We recommend that the organization implement procedures to ensure the timely preparation, certification, and submission of the annual Data Collection Form and reporting package. This should include assigning responsibility for tracking deadlines, establishing a completion checklist, and documenting management review prior to submission. Action Taken: The Agency will assign the CFO the responsibility of reviewing all 9melines and documents needed for the annual audit.

View Audit 400777

Finding 1213897 (2024-002)

Material Weakness 2024

Redevelopment Authority of the County of Berks

PA

Cash Management Reporting Significant Deficiency § 200.307

The Authority implemented a new policy to track and document program income: a. Upon receipt of program income, it shall be entered individually into IDIS and assigned to an activity or activities within fifteen (15) calendar days of receipt. b. At the next request for funds for an activity which in...

The Authority implemented a new policy to track and document program income: a. Upon receipt of program income, it shall be entered individually into IDIS and assigned to an activity or activities within fifteen (15) calendar days of receipt. b. At the next request for funds for an activity which includes funding from program income, program income shall be used prior to requesting federal funds for the activity. c. The request for federal funds shall be prepared by the Fiscal Officer and reviewed by one of the Assistant Fiscal Officers to determine if program income is being used prior to the request of federal funds. d. If it has been determined and documented that program income is being used prior to the request for federal funds, the request shall be forwarded to the Executive Director for approval. This finding has since been resolved in 2025, with a new policy developed and implemented on April 1, 2025.

View Audit 400734

Finding 1213895 (2024-001)

Material Weakness 2024

Redevelopment Authority of the County of Berks

PA

Internal Control / Segregation of Duties Subrecipient Monitoring Reporting § 200.303

In general, management agrees with the finding. It should be noted that internal controls for supervisory review of reporting requirements were in place but were not written controls or processes. Reporting for the CDBG Program is accomplished through the preparation of the annual Comprehensive Annu...

In general, management agrees with the finding. It should be noted that internal controls for supervisory review of reporting requirements were in place but were not written controls or processes. Reporting for the CDBG Program is accomplished through the preparation of the annual Comprehensive Annual Performance and Evaluation Report (CAPER). Written policies and procedures for the CAPER have been developed. Reporting for the Emergency Rental Assistance Program is accomplished through an online reporting system of the U.S. Treasury and by email to the Pennsylvania Human Services Department. This finding has since been resolved in 2025, with a new policy developed and implemented on December 12, 2025.

View Audit 400734

Finding 1213834 (2024-004)

Material Weakness 2024

The Salvation Army Golden State Division

CA

Material Weakness School Nutrition Programs Equipment & Real Property Management

Planned Corrective Action: The Division will design and implement 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: Al Agpoon,...

Planned Corrective Action: The Division will design and implement 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: Al Agpoon, Golden State Division Controller

View Audit 400681

Finding 1213788 (2024-002)

Material Weakness 2024

The Salvation Army Golden State Division

CA

Internal Control / Segregation of Duties Subrecipient Monitoring Allowable Costs / Cost Principles § 200.502

Planned Corrective Action: The Division will design and implement a precise control to ensure that the amount of food distributed is properly reviewed and that the Division maintains such evidence. Anticipated Completion Date: 9/30/2026 Responsible Contact Person: Al Agpoon, Golden State Division Co...

Planned Corrective Action: The Division will design and implement a precise control to ensure that the amount of food distributed is properly reviewed and that the Division maintains such evidence. Anticipated Completion Date: 9/30/2026 Responsible Contact Person: Al Agpoon, Golden State Division Controller

View Audit 400681

Finding 1213586 (2024-001)

Material Weakness 2024

Virgin Islands Diabetes Center of Excellence

VI

Allowable Costs / Cost Principles Material Weakness Reporting

VIDCOE will establish and document capitalization thresholds and procedures for identifying, recording, and depreciating capital assets, including maintaining a fixed asset register with periodic reconciliations. Procedures will also be implemented to ensure prepaid expenses are recorded appropriate...

VIDCOE will establish and document capitalization thresholds and procedures for identifying, recording, and depreciating capital assets, including maintaining a fixed asset register with periodic reconciliations. Procedures will also be implemented to ensure prepaid expenses are recorded appropriately and amortized over the periods benefited. In addition, grant accounting policies will be strengthened to ensure that funds received in advance are recorded as refundable advances and recognized as revenue only as allowable expenditures are incurred, in compliance with grant agreements and federal requirements. To further strengthen internal controls, VIDCOE will implement formal supervisory review and reconciliation procedures, including routine account reconciliations and financial statement reviews, to ensure transactions are properly classified, supported, and recorded. VIDCOEs’ Management expects to fully implement all corrective actions by July 30, 2026.

View Audit 400496

Finding 1213573 (2024-051)

Material Weakness 2024

Government of Guam

GU

Allowable Costs / Cost Principles Period of Performance Reporting

Finding No.: 2024-051 Period of Performance Responding Agency: Guam Homeland Security (GHS) Responsible Personnel: Esther Aguigui, Director GHS will create a Standard Operating Procedure (SOP) to establish internal policies and procedures over compliance with applicable period of Performance require...

Finding No.: 2024-051 Period of Performance Responding Agency: Guam Homeland Security (GHS) Responsible Personnel: Esther Aguigui, Director GHS will create a Standard Operating Procedure (SOP) to establish internal policies and procedures over compliance with applicable period of Performance requirements, as well as retention of all grant agreements. GHS will also identify department personnel responsible.

View Audit 400461

Finding 1213563 (2024-047)

Material Weakness 2024

Government of Guam

GU

Special Tests & Provisions Eligibility Reporting § 200.303

Finding No.: 2024-047 Special Test and Provisions Provider Eligibility (Screening and Enrolment) Responding Agency: Department of Public Health and Social Services (DPHSS) Responsible Personnel: Theresa Arriola, Director DPHSS agrees with this finding. DPHSS is aware that deficiencies exist with the...

Finding No.: 2024-047 Special Test and Provisions Provider Eligibility (Screening and Enrolment) Responding Agency: Department of Public Health and Social Services (DPHSS) Responsible Personnel: Theresa Arriola, Director DPHSS agrees with this finding. DPHSS is aware that deficiencies exist with the Medicaid provider enrolment process. DPHSS’s response to this deficiency is addressed in its modernization plan, which will automate certain provider enrolment functions. In March 2024, DPHSS performed site visits for 21 providers, and since then has continued to perform site visits year-round. Memorandums regarding provider compliance topics have also been communicated to providers and published on the provider portal, including information regarding criminal background checks. DPHSS is currently contracted with a consultant that is assisting in the implementation of compliant provider enrolment operations, which includes policy revisions, updates to provider applications and disclosure forms, development of standard operating procedures, and training for both staff and providers. In addition, DPHSS is currently in the process of establishing a Medicaid Program Integrity Unit (PI Unit) with a mission to conduct independent and objective Medicaid program integrity functions adherent to federal and local laws. The PI Unit will also assist DPHSS in addressing and managing Medicaid related Corrective Action Plans.

View Audit 400461

Finding 1213560 (2024-044)

Material Weakness 2024

Government of Guam

GU

Special Tests & Provisions Subrecipient Monitoring Reporting

Finding No.: 2024-044 Special Test and Provisions Health and Safety Requirements Responding Agency: Department of Public Health and Social Services (DPHSS) Responsible Personnel: Theresa Arriola, Director The Bureau of Child Care Services (BCCS) disagrees with this finding. All applicable providers ...

Finding No.: 2024-044 Special Test and Provisions Health and Safety Requirements Responding Agency: Department of Public Health and Social Services (DPHSS) Responsible Personnel: Theresa Arriola, Director The Bureau of Child Care Services (BCCS) disagrees with this finding. All applicable providers were monitored and met necessary health and safety requirements. All supporting inspection reports and certifications exist and were provided to the auditors via a OneDrive link on February 9, 2026, following a subsequent request for information. Additionally, in accordance with the Rules and Regulations Governing Child Care Facilities Section 1.5.00 (a), Relative Care facilities are exempt from Sanitary Permits. BCCS requests a detailed breakdown of the $3,726,391 valuation to clarify if the audit team applied a total disallowance of payments or a weighted penalty for perceived documentation gaps. We maintain that this dollar amount is fundamentally inaccurate if the assessment did not properly factor in the specific regulatory exemptions applicable to these providers. Furthermore, BCCS questions the rationale used to assign such a substantial fiscal impact to an administrative-heavy finding, especially where the core program requirements and services were successfully fulfilled.

View Audit 400461

Finding 1213526 (2024-024)

Material Weakness 2024

Government of Guam

GU

Subrecipient Monitoring Reporting Internal Control / Segregation of Duties § 200.302 § 200.328 § 200.329

Finding No.: 2024-024 Reporting Responding Agency: Department of Administration (DOA) Responsible Personnel: Edward M. Birn, Director The Agency is reviewing its federal grants management to ensure robust handover and succession plans are in place of future programs.

View Audit 400461

Finding 1213522 (2024-020)

Material Weakness 2024

Government of Guam

GU

Reporting Internal Control / Segregation of Duties Subrecipient Monitoring § 200.329

Finding No.: 2024-020 Reporting Responding Agency: Department of Administration (DOA) Responsible Personnel: Edward M. Birn, Director The Agency disagrees with this finding. Please refer to a letter dated March 31, 2026, regarding Reports on Compliance September 30, 2024

View Audit 400461

Finding 1211181 (2024-001)

Material Weakness 2024

Houston Housing Authority

TX

HUD Housing Programs Internal Control / Segregation of Duties Material Weakness

2024-001 Financial Reporting Material Weakness in Internal Control Material Noncompliance Condition: During our audit of the Authority’s financial statements, numerous adjustments were needed to properly report the financial statements in accordance with generally accepted accounting principles. Cer...

2024-001 Financial Reporting Material Weakness in Internal Control Material Noncompliance Condition: During our audit of the Authority’s financial statements, numerous adjustments were needed to properly report the financial statements in accordance with generally accepted accounting principles. Certain accounts had not been properly reconciled and corrective entries were not readily available. Significant audit adjustments were necessary for several audit areas and the audit was significantly delayed due to these adjustments. Auditor’s Recommendations: The Authority should continue to develop and implement internal controls over both internal and external reporting, and the year-end close process to ensure reporting remains accurate and timely, with any unexpected financial data being investigated and corrected before it is reported. The Authority should consider additional staff training on development activities. Action Taken: The Houston Housing Authority agrees with this finding and related recommendations. During this audit, as these issues arose, notes were taken, evaluation of what had happened was made so that we could make the necessary adjustments to our procedures to prevent the continuation of these issues. In addition, in the previous year we hired a firm to come in and undertake a review of the finance department. The purpose of this review was to review our existing staffing levels, workloads, experience, etc., for purposes of proposing a reorganization of the finance department to address any deficiencies. We have reviewed the recommendations from this consultant and are in the process of implementing many of the recommended changes. There have been a number of staffing changes made during the year with the intent of improving the overall performance of the finance department. We are in the process of evaluating if additional staff are needed to expand the capacity of the Finance department. In November of 2024 the Houston Housing authority converted to a new accounting system. The Yardi system was implemented and we began processing all transactions on this new system. Unfortunately, there have been a significant amount of post implementation corrections and modifications that have had to be made and continue to occur. We are still undergoing these implementation and modification processes and as a result of this we continue to have to make adjusting entries to correct errors as they are discovered. To further complicate this system conversion there were a number of changes made to the management companies that we utilize to do our primary property level accounting. They have also been converting portions of their accounting systems to Yardi. Many of the same problems that have been encountered during our system conversion have also been encountered by the management companies. It is anticipated that most of these system conversion related issues will be resolved within the 2025 calendar year. The VP Fiscal and Business Operations as well as the Director of Finance are responsible for implementing the necessary process and procedural changes to eliminate the need for this type of finding for the 2024 audit.

View Audit 400373

Finding 1210992 (2024-017)

Material Weakness 2024

State of Mississippi

MS

Special Tests & Provisions Student Financial Aid Allowable Costs / Cost Principles

Rndlng 2024-017: Spedal Tests and Provisions Significant Defldency In Internal Control over Compliance Crit eria: Per 45 CFR 1356.2l (ml(l ), in meeting the requirements of section 47l(a)(ll) of the Act, the tilie IV·E agency must review at reasonable, specifi c, tim e-limi tedperiods, to be establi...

Rndlng 2024-017: Spedal Tests and Provisions Significant Defldency In Internal Control over Compliance Crit eria: Per 45 CFR 1356.2l (ml(l ), in meeting the requirements of section 47l(a)(ll) of the Act, the tilie IV·E agency must review at reasonable, specifi c, tim e-limi tedperiods, to be established by the agency, the amount of the payments made for foster care maint enance to assure their continued appropriateness , and that the amount made to a licensed or approved relative or kinship foster famil y home is the same as th e amount that would have been made if the child was placed in a licensed or appr oved non-relative foster family home. Based on the Olicia Y. Lawsuit' s Mi ssissippi Sett.lem ent Agreement and Reform Plan, MOCPS is requ ired to review and publi sh u pdated! foster boardpayment rates every two years. Per 45 CFR 75.303(a), non-Federal entities expending HHS awards must establish and maintain effective internal contro ls over comp liance with Federal states, regulations, and the terms and conditions of the Federal award. Condit ion: Our audit procedures over foster care board payments disclosed that the approved payment board rates were unattai nable . The rates had not been updated from the rate approved in 2019 and no documentation could be provided for the required biannual review. Furt her, therate applied for children aged 0- 8 were not the most recent approved rates resulting in underpayments to foster families. Perspective: Below are the exceptions noted in our testing of foster care board payments for proper allocation of the rates and their approval. The samples were not statistically valid. • One of tenrate categories did not have the proper rateappliedbased on provided board rates resulting in twenty-six of forty sample payment Items being underpaid. • MDCPS did not maintain adequate documentation for the required rate review. Personnel Responsible for Corrective Action: Name: A/asha King Title: Grants Accounting Team Lead Email: Aiasha.King@mdcps.ms.gov Phone Number: 601-359-4016 Co rr ective Acti on Plan: Prior to lhe Single Audit, MDCPS im plemented the Foster Board Payment Review Standard Operating Proce dure (2.15.9.1) to ensure payment rates are verified and approved prior to issuan ce. Annual reviews of board payment rates will be conducted to ensure alignment with approved rates. Antldpatecl Completion Date: Completed as of March 19, 2026.

View Audit 400294

Finding 1210991 (2024-016)

Material Weakness 2024

State of Mississippi

MS

Student Financial Aid Eligibility Significant Deficiency

Finding 2024 - 016: Ellglblllty Significant Defldency In Internal Control Over Compliance Criteria: Per 45 CFR 75.1356.21, .22 and .30, a title IV-E agency must determine eligibility of foster homes and foster children prior to providing foster care maintenance payments. Per 45 CFR 7S. 303(a), non-F...

Finding 2024 - 016: Ellglblllty Significant Defldency In Internal Control Over Compliance Criteria: Per 45 CFR 75.1356.21, .22 and .30, a title IV-E agency must determine eligibility of foster homes and foster children prior to providing foster care maintenance payments. Per 45 CFR 7S. 303(a), non-Federal entities expending HHS awards must establish and maintai n effective inte rnal contro ls over compliance with Federal states, regulat ions, and the terms and conditions of the Federal award. MDCPS policies and procedures require a two-level approval for child eligibility determinations . A Social Worker comp letes an eligibility packet for each child and signs of f before submitting the eligibility packet to the Eligibility department. An Eli gibility Worker reviews and approves the eligibility packets prior to submitt ingthe packet for the El i gibility Supervisor's review. The Eli gibility Supervisor makes the necessary adjustments prior to final approval. Condition: Our audit procedures over eligibility packets disclosed a lack of approval from the Social Worker and second-level approval from the Eligibility Supervisor. Perspective: Below are the exceptions noted in our testing of eligibility for proper approval of eligibility packets. The sample was not statistically valid. • Eleven of forty sample items did not have proper Social Worker sign off. • Twenty-eight of forty sample had only one level of approval documented. All eligibility determinations included at least one level of approval, but MCOPS's policies were not implemented consistently. Personnel Responsib le for Corrective Action: Name: Kristi Plotner Title: Deputy Commissioner of Care Management Email : Kristi .Pl otner@md cps.ms.gov Phone Number: 769-352-5532 Corrective Action Plan: MDCPS will enforce our policy requiring approval of eligibility packets to ensure all eligibility packets are complete and accurate. The Agency is also evaluating its existing policy to strengthen internal controls while improving operational efficiency. As part of this effort, we are reviewing eligibility determination procedures to determine whether to move to a single level of approval model. The objective is to ensure that eligibility determinations remain accurate, well-documented, and compliant with federal requirements, while aligning internal processes with best practices in risk based control design. Antidpated Completion Date: Policy enforcement completed as of March 31, 2026 Agency review of eligibility determination procedures to be completed as of Juty 1, 2027. Agency will continue to follow current policy in effect.

View Audit 400294

Finding 1210980 (2024-037)

Material Weakness 2024

State of Mississippi

MS

Reporting Internal Control / Segregation of Duties Procurement, Suspension & Debarment

ALN Number 2024 -037 93.558 Temporary Assistance for Needy Families (TANF) 93.568 Low-Income Home Energy Assistance Program (LIHEAP) Strengthen Controls to Ensure Compliance with Federal Funding Accountability and Transparency Act (FFATA) Reporting Requirements. Federal Award No. All Current Active ...

ALN Number 2024 -037 93.558 Temporary Assistance for Needy Families (TANF) 93.568 Low-Income Home Energy Assistance Program (LIHEAP) Strengthen Controls to Ensure Compliance with Federal Funding Accountability and Transparency Act (FFATA) Reporting Requirements. Federal Award No. All Current Active Grants Response: MOHS does not concur with this finding. MOHS has implemented and adhered to standardized operating procedures (SOPs) over the past year to ensure timely and periodic reporting under the Federal Funding Accountability and Transparency Act (FFATA). In March 2025. the federal government retired the Federal Subaward Reporting System (FSRS), which MDHS used to submit new and modified awards. The successor platform, SAM.gov. launched with migrated award data that reflects only the most recent award amount. Historical submission details-including the timestamps that demonstrated timely filings-were not retained in the migrated records. Because the majority of MDHS's FFATA submissions typically occur in November and January. the migrated data does not display the original submission dates associated with those reports. Following the retirement of FSRS, MDHS no longer has access to the legacy system and therefore cannot produce the historical report previously used to verify timely submission. Additionally, the compliance supplement does not address the FFATA reporting processes within SAM.gov. Notwithstanding these system changes, MOHS continues to prepare and submit FFATA reports in accordance with its established SOPs and within the required timeframes. Corrective Action Plan: MOHS will make efforts to create practical. auditable processes to ensure timely and accurate FFATA reporting and solid proof of timeliness and completeness, in the new system.

View Audit 400294

Finding 1210976 (2024-038)

Material Weakness 2024

State of Mississippi

MS

Subrecipient Monitoring Internal Control / Segregation of Duties Significant Deficiency

SUBRECIPIENT MONITORING ALN Number 93.558 Temporary Assistance for Needy Families (TANF) 2024-038 Strengthen Controls over On-Site Monitoring for the Temporary Assistance for Needy Families (TANF) Program. Federal Award No. All Current Active Grants Response: MDHS concurs that controls should be str...

SUBRECIPIENT MONITORING ALN Number 93.558 Temporary Assistance for Needy Families (TANF) 2024-038 Strengthen Controls over On-Site Monitoring for the Temporary Assistance for Needy Families (TANF) Program. Federal Award No. All Current Active Grants Response: MDHS concurs that controls should be strengthened over On-Site monitoring for the TANF program. Corrective Action Plan: 1. Strengthen Controls over On-Site Monitoring for the TANF Program A. The Office of Compliance. Division of Monitoring has made significant strides in strengthening controls over the subrecipient monitoring process. The Division continues to review and update the processes and procedures as necessary to ensure processes are adequate and effective. Staff are constantly notified/trained on updates to policies. procedures. and regulations to ensure continued compliance with monitoring the agency's subgrant agreements. B. Responsible Party: Laketha Gilmore. Director of Monitoring and Kameron Harris, Chief Compliance Officer C. Completion Date: The corrective action has been implemented and is ongoing.

View Audit 400294

Finding 1210973 (2024-034)

Material Weakness 2024

State of Mississippi

MS

Procurement, Suspension & Debarment Reporting Internal Control / Segregation of Duties § 200.303

The Department should review and enhance controls and procedures to ensure that financial and programmatic/progress reports are reviewed and approved prior to submission. Copies of all reports should be retained and be readily available for audit. Response: The Department concurs with the finding an...

The Department should review and enhance controls and procedures to ensure that financial and programmatic/progress reports are reviewed and approved prior to submission. Copies of all reports should be retained and be readily available for audit. Response: The Department concurs with the finding and the need to enhance and strengthen controls and procedures to ensure programmatic/progress reports are reviewed and approved prior to submission and retain copies for audit. Prior to the conclusion of the audit, the Department formed a Grants Management Division and initiated the development of an internal grants management module for the agency. Corrective Action: The Department formed a Grants Management Division within the agency in 2025 responsible for the financial reporting of its federal grants. The Division prepares, submits, and retains copies of the financial reports and supporting documentation. Prior to submission, the prepared financial reports are approved by the responsible program. Programmatic/progress reports are the responsibility program. The program will track programmatic/progress reports to ensure all are reviewed and approved prior to submission and retained for audit purposes. Name of contact person responsible for the corrective action: Lucreta Tribune (Grants Management Division) and Theresa Kittle (Program-Epidemiology) Anticipated date for completion of corrective action: December 31, 2026

View Audit 400294

Finding 1210883 (2024-002)

Material Weakness 2024

Trufund Financial Services, Inc.

NY

Allowable Costs / Cost Principles Internal Control / Segregation of Duties § 200.303 § 200.403

Finding No. 2024-002 Loan Originations Involving Fraudulent Documentation Federal Agency: U.S. Department of Commerce Economic Development Administration Program Titles and ALN Numbers: EDA Revolving Loan Fund Program Capital Allocation - New York Contractor Loans (a non major program) (11.307) Fede...

Finding No. 2024-002 Loan Originations Involving Fraudulent Documentation Federal Agency: U.S. Department of Commerce Economic Development Administration Program Titles and ALN Numbers: EDA Revolving Loan Fund Program Capital Allocation - New York Contractor Loans (a non major program) (11.307) Federal Grant Numbers: Award #01-79-15074 Compliance Requirements: Activities Allowed and Unallowed and Allowable Costs Contact Person: James H. Bason, President and Chief Executive Officer, TruFund Financial Services, Inc., 9 East 40th, NY 10016 Corrective Action: (1) Federal agency notification: Management has notified the U.S. Department of Commerce Economic Development Administration of this finding and the questioned cost, and will cooperate fully with any federal review or recovery process. (2) Federal corrective action plan: Management has provided EDA with a corrective action plan addressing the specific internal control deficiencies applicable to federally funded loan programs. (3) Enhanced internal controls over federally funded programs: All corrective actions implemented under Finding 2024-001 apply equally to all federally funded loan programs, including enhanced verification, segregation of duties, and suspicious activity monitoring. (4) Replenishment of EDA Revolving Loan Fund: Subsequent to year-end and prior to the issuance of this report, TruFund replenished $410,000 in non-federal, unencumbered funds to the EDA Revolving Loan Fund, in response to EDA's request to restore the fund balance. Anticipated Completion Date: April 30, 2026

View Audit 400229

Finding 1210663 (2024-002)

Material Weakness 2024

Gascosage Electric Cooperative

MO

Internal Control / Segregation of Duties Subrecipient Monitoring Reporting § 200.303

Gascosage Electric Cooperative Responsible Party: Luther Riddle, General Manager LRiddle@gascosage.coop Audit Period Ending: December 31, 2024 Finding #2024-002 Statement of Condition - Effective internal controls to maintain evidence of review and approval of reports with appropriate segregation of...

Gascosage Electric Cooperative Responsible Party: Luther Riddle, General Manager LRiddle@gascosage.coop Audit Period Ending: December 31, 2024 Finding #2024-002 Statement of Condition - Effective internal controls to maintain evidence of review and approval of reports with appropriate segregation of duties were not in place. The Organization concurs with the finding and management will implement procedures to ensure appropriate internal control procedures are in place for reporting. Management will implement additional internal controls to ensure appropriate segregation of duties between report preparation and review.

View Audit 399958

Finding 1210617 (2024-006)

Material Weakness 2024

Philander Smith College

AR

Student Financial Aid Internal Control / Segregation of Duties

Federal Program/ Assistance Listing Number (ALN) 84.268, 84.063, 84.007, 84.033 Finding Reference Number 2024-006 1. Finding Summary The auditor identified one instance in which the University did not return unearned Title IV funds within the required 45-day time frame following a student's withdraw...

Federal Program/ Assistance Listing Number (ALN) 84.268, 84.063, 84.007, 84.033 Finding Reference Number 2024-006 1. Finding Summary The auditor identified one instance in which the University did not return unearned Title IV funds within the required 45-day time frame following a student's withdrawal, with the return occurring significantly after the institution's date of determination. 2. Management's Position Management agrees with the finding. Management Explanation Management agrees with the finding and concurs that the return of unearned Title IV funds must occur within the required regulatory time frame. The University recognizes the importance of timely Return of Title IV processing and is committed to strengthening internal controls, oversight, and coordination to ensure future compliance. 3. Root Cause Analysis The root cause was the absence of a formal monitoring and tracking process for Return of Title IV (R2T4) obligations, combined with limited supervisory oversight and insufficient coordination between the Office of Financial Aid, the Business Office, and Student Retention. These factors resulted in delayed identification of withdrawals and untimely processing of required Title IV fund returns. 4. Corrective Action( s) Management is working to implement standardized workflows and periodic internal monitoring. Description of Corrective Actions To address this finding and prevent recurrence, the University has centralized oversight of the Return of Title IV (R2T4) process by assigning responsibility to the Director of Financial Aid and implementing a formal tracking and monitoring system to ensure all returns are completed within the required 45-day timeframe. The Director of Financial Aid now collaborates with Student Retention to receive prompt notification of student withdrawals. Once funds are removed from the student account for R2T4, the Business Office returns the funds within 3 days. In addition, supervisory review procedures have been established to verify the accuracy and timeliness of R2T4 calculations and returns, strengthening internal controls and ensuring ongoing compliance with federal regulations. 5. Risk Mitigation (Required - Even if Disagreeing) The University recognizes the importance of proactively managing regulatory risk related to the Return of Title IV process. The corrective actions implemented are intended to improve the timely identification of student withdrawals, strengthen oversight of R2T 4 calculations and returns, and enhance coordination among responsible offices, thereby reducing the risk of delayed returns, regulatory exposure, and future audit findings .. 6. Responsible Party • Office/Department: Office of Financial Aid • Title of Responsible Official: Financial Aid Director • Name (optional): ____________ _ 7. Implementation Timeline • Corrective action implemented: Yes (No) • If not fully implemented, expected completion date: June 30, 2026 8. Status of Corrective Action (For Prior-Year or Repeat Findings) Fully implemented Partially implemented (Not yet implemented) Evidence of Implementation In progress, evidence is not yet available. 9. Monitoring and Sustainability The University will ensure ongoing compliance by conducting routine internal reviews of Return of Title IV activity, including verification of withdrawal notifications, calculation dates, and return confirmations. R2T4 tracking reports and supervisory oversight will be used to monitor timeliness and accuracy, and procedures will be reinforced through continued staff training and management review to support long-term sustainability.

View Audit 399950

Finding 1209144 (2024-122)

Material Weakness 2024

State of Arizona

AZ

Special Tests & Provisions Material Weakness Reporting

Assistance listing numbers and program names: 93.778 Medicaid Assistance Program (Medicaid; Title XIX) 93.778 COVID-19 Medicaid Assistance Program (Medicaid; Title XIX) 93.767 Children’s Health Insurance Program (CHIP) Agency: Arizona Health Care Cost Containment System (AHCCCS) Name of contact pers...

Assistance listing numbers and program names: 93.778 Medicaid Assistance Program (Medicaid; Title XIX) 93.778 COVID-19 Medicaid Assistance Program (Medicaid; Title XIX) 93.767 Children’s Health Insurance Program (CHIP) Agency: Arizona Health Care Cost Containment System (AHCCCS) Name of contact person and title: Jeff Tegen, Assistant Director, AHCCCS Division of Business and Finance Completion date: June 30, 2025 Agency’s Response: Concur AHCCCS would like to note this matter was discovered through internal review of Office of the Inspector General (OIG) recoupment documentation and filings with Centers for Medicare & Medicaid Services (CMS). This matter was reviewed in detail by our financial management team and AHCCCS determined this was caused by a few factors: (1) staffing issues and employee turnover in all units involved in the process to return OIG recoupments to CMS. (2) A breakdown of inter and intra-departmental communication and collaboration. Actions Taken: ● Filling the related following positions that experienced turnover: Accounting Supervisor, Reporting Administrator, and 2 Accounting Specialists. ● Increased collaboration across the respective departments and divisions to ensure the federal share of all case recoupments is timely returned to CMS. ● Revised our standard work processes to include quarterly reconciliations of case recoupments among the various departments and divisions. Actions Remaining: ● AHCCCS anticipates having reported and returned the federal share to CMS for all case recoupments identified by June 30, 2025.

View Audit 399861

Finding 1209141 (2024-121)

Material Weakness 2024

State of Arizona

AZ

Special Tests & Provisions Material Weakness Reporting

Assistance listing numbers and program names: 93.778 Medicaid Assistance Program (Medicaid; Title XIX) 93.778 COVID-19 Medicaid Assistance Program (Medicaid; Title XIX) 93.767 Children’s Health Insurance Program (CHIP) Agency: Arizona Health Care Cost Containment System (AHCCCS) Name of contact pers...

Assistance listing numbers and program names: 93.778 Medicaid Assistance Program (Medicaid; Title XIX) 93.778 COVID-19 Medicaid Assistance Program (Medicaid; Title XIX) 93.767 Children’s Health Insurance Program (CHIP) Agency: Arizona Health Care Cost Containment System (AHCCCS) Name of contact persons and titles: Vanessa Templeman, Inspector General, AHCCCS Office of Inspector General Jeff Tegen, Assistant Director, AHCCCS Division of Business and Finance Completion date: December 31, 2025 Agency’s Response: Concur In fiscal year 2023, the process of holding quarterly reviews of deferred cases did not occur due to resources being diverted to focus on Strike Force activities involved in addressing the behavioral health crisis. Additionally, Office of the Inspector General (OIG) announced a re-organization in December 2023 that resulted in permanent transitions to other teams for several staff. Teams were given time to finalize cases and move items to other investigators in order to limit disruption to cases. By April 2024, after the Strike Force initiative had been unwound and the member team structure changes for personnel were finalized, the member team restarted its process of quarterly deferred case reviews. At the first review in April 2024, cases in the deferred backlog that were not completed in the timeframe set for the reviews were postponed to the next quarterly review in July. AHCCCS OIG commits to a review of the current Deferred Process and will determine areas of improvement to include timeliness for deferred case review completion, quarterly completed deferred case review reports, and required documentation for all deferred case processes.

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Finding 1209130 (2024-120)

Material Weakness 2024

State of Arizona

AZ

Special Tests & Provisions Procurement, Suspension & Debarment Cash Management

Assistance listing number and program name: 93.778 Medicaid Assistance Program (Medicaid; Title XIX) 93.778 COVID-19 Medicaid Assistance Program (Medicaid; Title XIX) Agency: Arizona Health Care Cost Containment System (AHCCCS) Name of contact person and title: Jeff Tegen, Assistant Director, AHCCCS...

Assistance listing number and program name: 93.778 Medicaid Assistance Program (Medicaid; Title XIX) 93.778 COVID-19 Medicaid Assistance Program (Medicaid; Title XIX) Agency: Arizona Health Care Cost Containment System (AHCCCS) Name of contact person and title: Jeff Tegen, Assistant Director, AHCCCS Division of Business and Finance Anticipated completion date: December 31, 2027 Agency’s Response: Concur In May 2023, AHCCCS announced its initial findings of credible and willful fraud by sober-living providers across the state. Since then, AHCCCS has suspended more than 300 providers, assisted over 10,000 individuals with the humanitarian response, and implemented more than 20 new initiatives to combat fraud, waste, and abuse in the Medicaid program. As the extent of the fraud was revealed, AHCCCS recognized the need for comprehensive, system-wide strategies. AHCCCS partnered with the Attorney General and Governor’s Office to develop a comprehensive plan to address the loopholes fraudulent providers were exploiting. Actions Taken: ● Increased scrutiny of claims based on claims volume. ● Issued a moratorium on new provider registrations for impacted provider types. ● Prevented Reimbursement of Claims for Impossibly Rendered Services. ● Claims for Substance Abuse Services for Children under the age of 12 to Require Clinical Review Prior to Payment. ● Set thresholds for services to initiate a prepayment review. ● Required claims to be billed for specific dates of service rather than ranges. ● Flagged claims for services of the same style/overlapping codes. ● Created a prepayment review process for providers utilizing suspicious billing practices. ● Eliminated retroactive billing. ● Credible Allegation of Fraud suspensions include both provider entities and owners/ behavioral health (BH) practitioners. ● Implemented ID.Me identity verification for AHCCCS Online. ● Required providers to disclose any third-party billing relationships. ● BH Providers are now considered high-risk provider types for provider enrollment. ● Per Diem codes have been set to only be able to be billed once per day. ● Practitioners, including BH Technicians, can no longer be patients at the same provider. ● Worked with the Arizona Corporation Commission to flag suspicious registrations. ● Ensured AHCCCS coding adhered to National Correct Coding Initiative standards and confirmed no edits had been turned off. ● Streamlined AHCCCS reporting of bad actors to the appropriate professional oversight boards. ● Creation and publication of the Covered Behavioral Health Services Guide to connect all relevant AHCCCS policies and explain how they interact in the Behavioral Health System of Care. ● Robust changes to our AHCCCS Provider Enrollment System to address fraud, waste and abuse (FWA) issues. ● Update to the Behavioral Health Residential Facilities policy (to be published shortly) to provide greater detail and clarity for providers and members about what should and should not be included in services rendered by this provider type. ● Creation of the prepayment review process for fee for service claims and inclusion of data measurement to allow for agile modification going forward to respond to over utilization or abuse of codes. ● Creation of the Community Partner Assistor Organization Reviews to prevent abuse of access to the Health-e-Arizona Plus system. ● Designated pathways of partnering on large scale quality of care investigations between the Division of Fee for Service and managed care organizations to prevent unnecessary member impact. ● Social media campaign to encourage the public to report FWA/abuse & neglect. ● Requirement of all providers to transition to Electronic Funds Transfer. ● Removed the phone attestation option for American Indian Health Program (AIHP) enrollment, and are in the process of implementing the AIHP verification process with tribal partners and Indian Health Services based on utilization. ● Memorandums of Understanding with AZ Board of BH Examiners and Board of Nursing to promote interagency information sharing and referrals, as well as the close referral relationship with the Arizona Department of Health Services. ● Regular Public BH System Cross-Agency Collaboration meetings including all agencies, boards, commissions and the GO in the public health space ● Updates to the provider enrollment policy in AMPM 610, explicitly requiring many more disclosures of providers, and making it clear without full and transparent registration information, providers will be terminated or denied enrollment with AHCCCS. ● Implemented policies which required BH Professionals, required to oversee the clinical services provided at Behavioral Health Residential Facilities and Outpatient Behavioral Health Clinics, to be reported upon registration and be listed on claims submissions ● Mandatory transition to Electronic Fund Transfer (direct deposit) for all AHCCCS provider reimbursements ● Linking BHP to BH companies and facilities they work for Actions Remaining (but not limited to): Implementing eligibility integrity requirements for AIHP enrollment. ● Implementation of Alivia – a new AI powered data analytics platform for pre-pay and post-pay claims analysis, currently in the development and planning stage ● Conduct onsite quality of care reviews for patients in treatment longer than 90 days. ● Require medical records to define specialized services. ● Implement a new pre/post pay claims system. AHCCCS continuously monitors our systems and investigates instances of fraud, waste or abuse. Any areas of concern which are identified are then addressed and system improvements are made. Furthermore, AHCCCS utilizes data analysis to confirm that these system improvements are having the intended impacts and that provider networks remain robust.

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Finding 1209091 (2024-110)

Material Weakness 2024

State of Arizona

AZ

Subrecipient Monitoring Internal Control / Segregation of Duties § 200.303 § 200.332 § 200.513 § 200.521

Assistance listing numbers and program names 84.010 Title I Grants to Local Education Agencies 84.367 Supporting Effective Instruction state Grants, Title II (formerly Improving Teacher Quality State Grants) Agency: Arizona Department of Education (ADE) Name of contact person and title: Sarka J. Whi...

Assistance listing numbers and program names 84.010 Title I Grants to Local Education Agencies 84.367 Supporting Effective Instruction state Grants, Title II (formerly Improving Teacher Quality State Grants) Agency: Arizona Department of Education (ADE) Name of contact person and title: Sarka J. White, Deputy Associate Superintendent Anticipated completion date: December 2027 Agency’s Response: Concur Monitoring of CMO We will update protocols and implement an annual monitoring process specifically for charter schools with CMO relationships by integrating defined procedures to evaluate additional conflicts of interest, related party transactions, and segregation of duties concerns, while assigning a programmatic risk label in addition to the one assessed by Grants Management. To ensure accurate identification and appropriate separation of responsibilities, Title I and Title II will incorporate procedures for detecting CMO associations within both the grant review process and programmatic monitoring functions, supported by coordinated information sharing across relevant departments. Updated policies will also include requirements for disclosure of organizational associations and embed these indicators into the LEA level risk framework that determines monitoring frequency and representation based on assessed risk. Checks and balances will include programmatic follow-up on these disclosures prior to review of funding applications and or any assistance provided. Title I and Title II will revise monitoring tools to include CMO specific review steps, provide targeted staff training on identifying CMO relationships and apply enhanced oversight procedures, and carry out funding and program approval activities and monitoring activities. These can be in the form of financial and performance report reviews, Grant approvals, Data submissions, technical assistance, and onsite or virtual visits, in alignment with the strengthened risk-based model. Completion will be demonstrated through finalized procedures, documented staff training, and the application of revised monitoring methods during the next annual grant and monitoring cycle. Monitoring – Programmatic – Grant Monitoring We have revised LEA monitoring policies and procedures to incorporate coordinated processes between departments for clear identification of charter schools with CMO relationships, require now disclosure of organizational associations, and strengthen oversight of conflicts of interest, related party transactions, and segregation of duties risks. Updated procedures also define a structured, risk-based monitoring framework that assigns LEA monitoring levels, representation, and monitoring frequency based on assessed risk, independent of CMO affiliation, while integrating new indicators into monitoring tools to support consistency through equal representation and ensuring each LEA is treated as an individual LEA without respect to associations. Staff have and will continue to receive targeted training on the revised requirements, and completion will be demonstrated through the approval and publication of updated procedures, documented staff training, and application of the enhanced risk-based monitoring approach during the next LEA monitoring cycle.

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Corrective Action Plans

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