Corrective Action Plans

Finding Number 2023-093 Subject Heading (Financial) or AL no. and program name (Federal) ALN: 21.019 Federal Program name: Emergency Rental Assistance Program (ERA) Planned Corrective Action Oklahoma Office of Management and Enterprise Services (OMES) acknowledges the Oklahoma State Auditor and Inspector Office’s (SAI) findings that OMES did not implement the proper internal controls and oversight of the ERA Program during FY2023. However, OMES has taken steps to correct these findings and follow the recommendations set forth by SAI. Beginning with FY2025, OMES has taken the following measures: • Oversight and management of the ERA program has been transferred to the OMES Grant Management Office (OMES-GMO) which has staff with several years of grant experience. OMES-GMO has recently hired additional staff, and the two staff members dedicated to the management of the ERA program have 20+ years of combined federal grant specific experience. • To ensure that the subrecipient agreement includes all the required terms under the ERA Program and that the agreement does not expire, OMES-GMO and the Communities of Foundation of Oklahoma (CFO) have recently executed a Subrecipient Grant Agreement Amendment that details the responsibilities of OMES to monitor CFO and the duties and processes that CFO must follow in regard to ERA Program, including detailed cash management policies. See Attached – Grant Agreement Amendment. • OMES-GMO required the return of the remaining ERA2 Program funds from CFO to ensure proper oversight and review of ERA expenditures is performed. • OMES-GMO has a multi-level system of internal controls for grant management and oversight that includes routine monitoring, desk review, and site visits for all projects and associated project/administrative expenditures to ensure allowability, accuracy, and assist in the detection of fraud. For example, OMES-GMO’s process for disbursing funds to a subrecipient requires a written request from the subrecipient with supporting documentation, then OMES-GMO assigns a staff lead and secondary grant analyst to perform a primary and secondary review for compliance and to require additional supporting documentation if needed to approve the request. Once those reviews are completed and approved by the OMES-GMO staff, the Director of the OMES-GMO must approve the request before it is sent to the OMES Finance Division, who will then verify the calculated amount(s) before completing the disbursement to the subrecipient. These internal controls and policies have been implemented for the management and oversight of the ERA Program and provide a multi-layer review that will prevent fraud and risk factors applicable to the ERA program. Additionally, the OMES-GMO staff assigned to the ERA program have the training and knowledge to ensure compliance with the Federal grant requirements. • Depending on the level of risk, OMES-GMO conducts monthly, bi-weekly or weekly meetings with each subrecipient to monitor the progress of projects and address any issues or changes that might impact the project. For the ERA Program, OMES-GMO conducts bi-weekly monitoring meetings with CFO and is currently reviewing documentation provided by CFO to ensure all current ERA projects are eligible under the ERA guidelines and that CFO is exercising the proper oversight over their subrecipients. • OMES-GMO will continue with their current ERA monitoring steps and internal controls and will work with CFO to ensure ERA program funds are spent in accordance with ERA program guidelines and state and federal regulations. Anticipated Completion Date Ongoing throughout the life of the grant Responsible Contact Person Brandy Manek

Finding Number 2023-092 Subject Heading (Financial) or AL no. and program name (Federal) ALN: 21.019 Federal Program name: Emergency Rental Assistance Program (ERA) Planned Corrective Action Oklahoma Office of Management and Enterprise Services (OMES) disagrees with the report did include the demographic section, which is a required reporting element. Per the email titled 2025.03.24 Reporting download Issue OIG, page 7 of the pdf request verification the demographic data was received. On page 6 of the attachments a response states that the data for Q1, Q2 and Q3 2023 had been received. Oklahoma Office of Management and Enterprise Services (OMES) acknowledges the Oklahoma State Auditor and Inspector Office’s (SAI) findings that OMES did not implement the proper internal controls and oversight of the ERA Program during FY2023. However, OMES has taken steps to correct these findings and follow the recommendations set forth by SAI. Beginning with FY2025, OMES has taken the following measures: • Oversight and management of the ERA program has been transferred to the OMES Grant Management Office (OMES-GMO) which has staff with several years of grant experience. OMES-GMO has recently hired additional staff, and the two staff members dedicated to the management of the ERA program have 20+ years of combined federal grant specific experience. • To ensure that the subrecipient agreement includes all the required terms under the ERA Program and that the agreement does not expire, OMES-GMO and the Communities of Foundation of Oklahoma (CFO) have recently executed a Subrecipient Grant Agreement Amendment that details the responsibilities of OMES to monitor CFO and the duties and processes that CFO must follow in regard to ERA Program, including detailed cash management policies. See Attached – Grant Agreement Amendment. • OMES-GMO required the return of the remaining ERA2 Program funds from CFO to ensure proper oversight and review of ERA expenditures is performed. • OMES-GMO has a multi-level system of internal controls for grant management and oversight that includes routine monitoring, desk review, and site visits for all projects and associated project/administrative expenditures to ensure allowability, accuracy, and assist in the detection of fraud. For example, OMES-GMO’s process for disbursing funds to a subrecipient requires a written request from the subrecipient with supporting documentation, then OMES-GMO assigns a staff lead and secondary grant analyst to perform a primary and secondary review for compliance and to require additional supporting documentation if needed to approve the request. Once those reviews are completed and approved by the OMES- GMO staff, the Director of the OMES-GMO must approve the request before it is sent to the OMES Finance Division, who will then verify the calculated amount(s) before completing the disbursement to the subrecipient. These internal controls and policies have been implemented for the management and oversight of the ERA Program and provide a multi-layer review that will prevent fraud and risk factors applicable to the ERA program. Additionally, the OMES- GMO staff assigned to the ERA program have the training and knowledge to ensure compliance with the Federal grant requirements. • Depending on the level of risk, OMES-GMO conducts monthly, bi-weekly or weekly meetings with each subrecipient to monitor the progress of projects and address any issues or changes that might impact the project. For the ERA Program, OMES-GMO conducts bi-weekly monitoring meetings with CFO and is currently reviewing documentation provided by CFO to ensure all current ERA projects are eligible under the ERA guidelines and that CFO is exercising the proper oversight over their subrecipients. • OMES-GMO will continue with their current ERA monitoring steps and internal controls and will work with CFO to ensure ERA program funds are spent in accordance with ERA program guidelines and state and federal regulations. Anticipated Completion Date Ongoing throughout the life of the grant Responsible Contact Person Brandy Manek

Finding Number 2023-091 Subject Heading (Financial) or AL no. and program name (Federal) ALN: 21.019 Federal Program name: Emergency Rental Assistance Program (ERA) Planned Corrective Action 1. Condition and Context: While documenting controls over Period of Performance for the ERA 1 grant, we noted payments made to subrecipients in the Statewide Accounting System were all put under one fund and were not distinguishable between ERA 1 and ERA 2. Therefore, OMES was unable to determine at a glance whether the funds distributed to subrecipients were attributable to ERA 1 or ERA 2. Further, we determined one of the subrecipients, Communities Foundation of Oklahoma (CFO), did not have sufficient internal controls over ERA 1 program spending to ensure all funds were expended by the end of the period of performance. • We disagree with SAI on the Statewide Accounting System separation of funds. The Statewide Accounting System did distinguish between ERA1 and ERA2. The Statewide Accounting System has funds 49400 and 49200 shows establishment of both federal funds in 2021. • We disagree with SAI on CFO’s internal controls. CFO did have internal controls in place to ensure funds were expended during the period of performance. Per ERA 1 Closeout Resource “The end date of the award period of performance is the last day for a grantee to obligate funds for ERA1 activities (September 30, 2022, for award funds received pursuant to the grantee’s initial allocation and December 29, 2022, for reallocated funds). Per documentation provided by SAI the general ledger shows a date before December 29, 2022. (Attachment 494,492, ERA Closeout Resource) 2. For eight of 30, or 26.67% of adjustments tested, the adjustment was to move expenses from ERA 2 to ERA 1 to meet ERA 1 spending requirements prior to closeout of the program. CFO comingled ERA 1 and ERA 2 funds and could not directly support each recharacterization with documentation for the specific transactions involved, but stated it was recharacterized to meet ERA 1 spending limits prior to the end of the period. In addition, CFO did not go back to revise any prior monthly or quarterly reports as required by Treasury. • We partially agree. We agree that funds cannot be moved from ERA 2 to ERA 1. • We disagree with SAI on comingling of funds. CFO did not comingle funds. CFO has 31 separate accounts within C-Suite their financial software. All accounts are listed and examples provided in the ERA Fund Open Report. • We disagree with SAI’s evaluation of the Treasury reporting requirement. CFO was not required to go back and revise prior monthly and quarterly reports per federal guidance. “As of December 2022, ERA1 grantees will only be able to edit their Final Report or as applicable, their Q4 2022 report. However, grantees may submit revisions to certain financial data submitted with their past quarterly reports, specifically, subrecipient/contractor/direct payee records; subaward/contract/direct payment records; and expenditure records when completing their Final Report or as applicable, their Q4 2022 Report. “While ERA1 grantees are no longer able to submit or revise any prior ERA1 quarterly reports, grantees may receive additional communications from Treasury’s compliance team to make corrections to past quarterly reports and as appropriate, the Final Report…” (Attachment ERA Closeout Resource pg 5) 3. For 11 of 30, or 36.67%, the adjustment was to move expenses between jurisdictions (City, State, County), which is unallowable per FAQ #42 and ERA reporting guidance. • We disagree with SAI’s unallowable cost. Due to a misunderstanding, CFO staff misstated that funds were moved between jurisdictions. Funds were not moved between jurisdictions. If a computer error occurred due to the large volume of checks that were being sent every week (approximately 1,600), not all errors were caught immediately. However, when further reviews were conducted and it was discovered a payment was issued incorrectly, the proper accounting procedures for correcting the errors were completed. (Attachment OneDrive_2025- 4-23(1)) • We disagree. FAQ 42 says nothing about jurisdictions. FAQ #42 states, “May a grantee provide ERA funds to another entity for the purpose of making payments more rapidly? To speed the delivery of assistance, grantees may enter into a written agreement with a nonprofit organization to establish a payment fund for the sole purpose of delivering assistance using ERA funds while a household’s application remains in process. A grantee may use such a process if: The process is reserved for situations in which an expedited payment could reasonably be viewed as necessary to prevent an eviction or loss of utility services that precludes employing the grantee’s standard application and payment procedures on a timely basis. The nonprofit organization has the requisite financial capacity to manage the ERA funds, such as being a certified community development financial institution. The nonprofit organization deposits and maintains the ERA funds in a separate account that is not commingled with other funds. The grantee receives all required application and eligibility documentation within six months. The nonprofit organization agrees in writing to return to the grantee any assistance that the household was ineligible for or for which the required documentation is not received within six months. Any funds not used by the nonprofit organization are ultimately returned to the grantee. If a payment made by the nonprofit organization is subsequently found to have been used for an ineligible household or an ineligible expense, or if the required application and eligibility documentation are not timely submitted, the payment will be considered an ineligible use of ERA funds by the grantee. Any administrative expenses attributable to a payment fund should be considered in accordance with FAQ 29.” (Attachment ERA FAQs) 4. When performing our testwork to determine whether ERA 1 expenditures met period of performance requirements (incurred on or before September 30, 2022), we noted 207 transactions occurred after September 30, 2022. Of the 207 transactions, we noted 40 that resulted in $10,711,668 (of this amount $2,313,435 is already questioned above) in questioned costs. • We disagree with SAI’s questioning of expenditures incurred after September 30, 2022. Per the ERA 1 Closeout Resource, “The end date of the award period of performance is the last day for a grantee to obligate funds for ERA1 activities (September 30, 2022, for award funds received pursuant to the grantee’s initial allocation and December 29, 2022, for reallocated funds). Per documentation provided by SAI, the general ledger shows a date before December 29, 2022. (Attachment ERA Closeout Resource pgs 1, 4) 5. For 13 of 207, or 6.28% of transactions tested, the adjustment was to move funds between funding jurisdictions (City, State, County), which is unallowable per FAQ #42 and ERA reporting guidance. (This resulted in $1,594,881 in questioned costs, of which $24,450 is questioned above) • We disagree with SAI’s questioned cost. Due to a misunderstanding CFO staff misstated that funds were moved between jurisdictions. Funds were not moved between jurisdictions. If a computer error occurred due to the large volume of checks that were being sent every week (approximately 1,600), not all errors were caught immediately. However, when further reviews were conducted and it was discovered a payment was issued incorrectly, the proper accounting procedures for correcting the errors were completed. (Attachment OneDrive_2025- 4-23(1)) • We disagree. FAQ #42 says nothing about jurisdictions. FAQ #42 states “May a grantee provide ERA funds to another entity for the purpose of making payments more rapidly? To speed the delivery of assistance, grantees may enter into a written agreement with a nonprofit organization to establish a payment fund for the sole purpose of delivering assistance using ERA funds while a household’s application remains in process. A grantee may use such a process if: The process is reserved for situations in which an expedited payment could reasonably be viewed as necessary to prevent an eviction or loss of utility services that precludes employing the grantee’s standard application and payment procedures on a timely basis. The nonprofit organization has the requisite financial capacity to manage the ERA funds, such as being a certified community development financial institution. The nonprofit organization deposits and maintains the ERA funds in a separate account that is not commingled with other funds. The grantee receives all required application and eligibility documentation within six months. The nonprofit organization agrees in writing to return to the grantee any assistance that the household was ineligible for or for which the required documentation is not received within six months. Any funds not used by the nonprofit organization are ultimately returned to the grantee. If a payment made by the nonprofit organization is subsequently found to have been used for an ineligible household or an ineligible expense, or if the required application and eligibility documentation are not timely submitted, the payment will be considered an ineligible use of ERA funds by the grantee. Any administrative expenses attributable to a payment fund should be considered in accordance with FAQ 29.” (Attachment ERA FAQs) 6. For 11 of 207, or 5.31%, the adjustment was to move funds between ERA 2 and ERA 1 and the adjustment was not directly supported with documentation for the specific transactions involved. It was noted as recharacterized to meet ERA 1 spending limits prior to the end of the period, and CFO did not go back to revise any prior monthly or quarterly reports as required by Treasury. (This resulted in $7,003,715 in questioned costs, of which $2,200,000 is questioned above) • Partially agree. • We agree that funds cannot be moved from ERA2 to ERA1 • We disagree with SAI’s evaluation of the Treasury reporting requirement. CFO was not required to go back and revise prior monthly and quarterly reports per federal guidance. “As of December 2022, ERA1 grantees will only be able to edit their Final Report or as applicable, their Q4 2022 report. However, grantees may submit revisions to certain financial data submitted with their past quarterly reports, specifically, subrecipient/contractor/direct payee records; subaward/contract/direct payment records; and expenditure records when completing their Final Report or as applicable, their Q4 2022 Report. “While ERA1 grantees are no longer able to submit or revise any prior ERA1 quarterly reports, grantees may receive additional communications from Treasury’s compliance team to make corrections to past quarterly reports and as appropriate, the Final Report…” (Attachment ERA Closeout Resource pg 5) 7. For 7 of 207, or 3.38% of transactions tested, the adjustment was to ‘correct accounts’ or ‘tie out accounts’; we determined these were not attributable to specific transactions but were ‘plug’ numbers to zero out the ERA 1 balance prior to the end of the period of performance to meet spend down requirements and were not supported by actual expenditures that can be determined to have been incurred on or before September 30, 2022. (This resulted in $1,837,072 in questioned costs, of which $88,985 is questioned above) • We partially agree. • We agree that funds cannot be moved from ERA 1 to ERA 2 • We disagree with SAI’s questioning of expenditures incurred after September 30, 2022. Per the ERA 1 Closeout Resource, “The end date of the award period of performance is the last day for a grantee to obligate funds for ERA1 activities (September 30, 2022, for award funds received pursuant to the grantee’s initial allocation and December 29, 2022, for reallocated funds). Per documentation provided by SAI, the general ledger shows a date before December 29, 2022. (Attachment ERA Closeout Resource pgs 1, 4) 8. For 7 of 207, or 3.38% of transactions tested, the adjustment was to CFO management fees. Management fees were retained on a percentage basis; therefore, the fee is not supported by actual expenditures that can be determined to have been incurred on or before September 30, 2022. (This resulted in $1,430,228 in questioned costs which were all questioned on finding 2023-028). We disagree with SAI’s questioning of expenditures incurred after September 30, 2022. Per the ERA 1 Closeout Resource, “The end date of the award period of performance is the last day for a grantee to obligate funds for ERA1 activities (September 30, 2022, for award funds received pursuant to the grantee’s initial allocation and December 29, 2022, for reallocated funds). Per documentation provided by SAI, the general ledger shows a date before December 29, 2022. (Attachment ERA Closeout Resource pgs 1, 9. We noted a total of $8,271,796 in management fees that were not expended for ERA 1 and therefore were not spent within the period of performance. Of this amount, $6,841,568 were management fees questioned in the SFY2021 and SFY2022 State of Oklahoma Single Audit reports and the remaining $1,430,228 is questioned on finding 2023-028. We disagree with SAI’s questioning of expenditures incurred after September 30, 2022. Per the ERA 1 Closeout Resource, “The end date of the award period of performance is the last day for a grantee to obligate funds for ERA1 activities (September 30, 2022, for award funds received pursuant to the grantee’s initial allocation and December 29, 2022, for reallocated funds). Per documentation provided by SAI, the general ledger shows a date before December 29, 2022. (Attachment ERA Closeout Resource pgs 1, 4) 10. For 2 of 207, or 0.97% of transactions tested, the payment was not supported by an itemized invoice to enable a determination that all the costs were incurred prior to September 30, 2022. (This resulted in $276,000 in questioned costs) • We disagree with SAI questioning cost and have provided supporting documentation in OneDrive - 2025-04-23(2) to show questioned expenditures. • We disagree with SAI’s questioning of expenditures incurred after September 30, 2022. Per the ERA 1 Closeout Resource, “The end date of the award period of performance is the last day for a grantee to obligate funds for ERA1 activities (September 30, 2022, for award funds received pursuant to the grantee’s initial allocation and December 29, 2022, for reallocated funds). Per documentation provided by SAI, the general ledger shows a date before December 29, 2022. (Attachment OneDrive -2025-04-23(2), ERA Closeout Resource pgs 1, 4 ) Oklahoma Office of Management and Enterprise Services (OMES) acknowledges the Oklahoma State Auditor and Inspector Office’s (SAI) findings that OMES did not implement the proper internal controls and oversight of the ERA Program during FY2023. However, OMES has taken steps to correct these findings and follow the recommendations set forth by SAI. Beginning with FY2025, OMES has taken the following measures: • Oversight and management of the ERA program has been transferred to the OMES Grant Management Office (OMES-GMO) which has staff with several years of grant experience. OMES-GMO has recently hired additional staff, and the two staff members dedicated to the management of the ERA program have 20+ years of combined federal grant specific experience. To ensure that the subrecipient agreement includes all the required terms under the ERA Program and that the agreement does not expire, OMES-GMO and the Communities of Foundation of Oklahoma (CFO) have recently executed a Subrecipient Grant Agreement Amendment that details the responsibilities of OMES to monitor CFO and the duties and processes that CFO must follow in regard to ERA Program, including detailed cash management policies. See Attached – Grant Agreement Amendment. • OMES-GMO required the return of the remaining ERA2 Program funds from CFO to ensure proper oversight and review of ERA expenditures is performed. • OMES-GMO has a multi-level system of internal controls for grant management and oversight that includes routine monitoring, desk review, and site visits for all projects and associated project/administrative expenditures to ensure allowability, accuracy, and assist in the detection of fraud. For example, OMES-GMO’s process for disbursing funds to a subrecipient requires a written request from the subrecipient with supporting documentation, then OMES-GMO assigns a staff lead and secondary grant analyst to perform a primary and secondary review for compliance and to require additional supporting documentation if needed to approve the request. Once those reviews are completed and approved by the OMES-GMO staff, the Director of the OMES-GMO must approve the request before it is sent to the OMES Finance Division, who will then verify the calculated amount(s) before completing the disbursement to the subrecipient. These internal controls and policies have been implemented for the management and oversight of the ERA Program and provide a multilayer review that will prevent fraud and risk factors applicable to the ERA program. Additionally, the OMES-GMO staff assigned to the ERA program have the training and knowledge to ensure compliance with the Federal grant requirements. • Depending on the level of risk, OMES-GMO conducts monthly, bi-weekly or weekly meetings with each subrecipient to monitor the progress of projects and address any issues or changes that might impact the project. For the ERA Program, OMES-GMO conducts bi-weekly monitoring meetings with CFO and is currently reviewing documentation provided by CFO to ensure all current ERA projects are eligible under the ERA guidelines and that CFO is exercising the proper oversight over their subrecipients. • OMES-GMO will continue with their current ERA monitoring steps and internal controls and will work with CFO to ensure ERA program funds are spent in accordance with ERA program guidelines and state and federal regulations. Anticipated Completion Date Ongoing throughout the life of the grant Responsible Contact Person Brandy Manek

Finding Number 2023-108 Subject Heading (Financial) or AL no. and program name (Federal) ALN: 21.019 Federal Program name: Coronavirus Relief Fund (CRF) Planned Corrective Action The State agrees with this finding. Within OMES, oversight and management of Federal grants has been transferred to the OMES Grant Management Office (OMES-GMO) which is staffed with individuals with several years of grant experience. OMES-GMO has a multi-level system of internal controls for grant management and oversight that includes routine monitoring, desk review, and site visits for all projects and associated project/administrative expenditures to ensure allowability, accuracy, and assist in the detection of fraud. Finally, OMES Finance has developed processes which provide for a more thorough coding of expenditures and proper review of expenditures when reporting on their GAAP Z. The State disagrees with the finding. The State had two Grant Award Notifications in place with the Boys and Girls Club which reflects the monies awarded to be used on the capital improvements and Club on the Go Mobile Clubhouses. This indicates the funds were obligated during the covered period. Per the email from the Keri for Jill Geiger Consulting, no signatures on the GANs were required and the Uniform Guidance does not require the GAN to be signed. Within OMES, oversight and management of Federal grants has been transferred to the OMES Grant Management Office (OMES-GMO) which is staffed with individuals with several years of grant experience. OMES-GMO has a multi-level system of internal controls for grant management and oversight that includes routine monitoring, desk review, and site visits for all projects and associated project/administrative expenditures to ensure allowability, accuracy, and assist in the detection of fraud. OMESGMO’s internal control processes ensure subrecipient risk assessments are performed and that proper grant awarding documentation is provided to subrecipients. Anticipated Completion Date September 2022 Responsible Contact Person Brandy Manek

Finding Number 2023-096 Subject Heading (Financial) or AL no. and program name (Federal) ALN: 21.019 Federal Program name: Coronavirus Relief Fund (CRF) Planned Corrective Action The State agrees with this finding. Within OMES, oversight and management of Federal grants has been transferred to the OMES Grant Management Office (OMES-GMO) which is staffed with individuals with several years of grant experience. OMES-GMO has a multi-level system of internal controls for grant management and oversight that includes routine monitoring, desk review, and site visits for all projects and associated project/administrative expenditures to ensure allowability, accuracy, and assist in the detection of fraud. Finally, OMES Finance has developed processes which provide for a more thorough coding of expenditures and proper review of expenditures when reporting on their GAAP Z. The State disagrees with the finding. The State had two Grant Award Notifications in place with the Boys and Girls Club which reflects the monies awarded to be used on the capital improvements and Club on the Go Mobile Clubhouses. This indicates the funds were obligated during the covered period. Per the email from the Keri for Jill Geiger Consulting, no signatures on the GANs were required and the Uniform Guidance does not require the GAN to be signed. Anticipated Completion Date September 2022 Responsible Contact Person Brandy Manek

Finding Number 2023-025 Subject Heading (Financial) or AL no. and program name (Federal) 20.509 - Formula Grants for Rural Areas Planned Corrective Action We concur with the auditor’s recommendations. On 06/17/2024, FSO and OMPT met to review established procedures. As of that date, the procedures are being properly followed. Anticipated Completion Date 7/1/2025 Responsible Contact Person Sam Ddamba/Eric Rose

Finding Number 2023-035 Subject Heading (Financial) or AL no. and program name (Federal) #17.225 Unemployment Insurance Planned Corrective Action The agency concurs with the findings and agrees with the recommendation. The agency acknowledges our responsibility for program integrity and proper controls for the RESEA program. As we referenced in our response last year, the agency has undertaken modernization efforts to provide better solutions for the RESEA program. EmployOklahoma is the first result of this effort in the workforce employment area and it launched in January 2025 as the replacement for OKJM. The majority of the findings above were related to cases pulled for the period between July 2022 and December 2022; there was improvement in the period from January 2023 to June 2023. We anticipate continued progress and improvement going forward, but there will continue to be elevated risk for inaccuracies until the agency’s modernization efforts are successful in implementing solutions to address both the case management and data reporting requirements needed to fully resolve these findings. Anticipated Completion Date Ongoing until modernization of RESEA tools is complete Responsible Contact Person Tammy Wood, RESEA/TAA Program Manager

Finding Number 2023-033 Subject Heading (Financial) or AL no. and program name (Federal) #17.225 Unemployment Insurance Planned Corrective Action OESC concurs with the audit finding and agrees with the recommendation. The decrease in the total dollars associated with this finding in comparison to the prior year demonstrates that the issue has been addressed with the programming that was completed in February 2023. The agency will continue to monitor ongoing results of the new programming to address any further adjustments needed for edge-case scenarios or to appropriately handle other system changes. Anticipated Completion Date Completed in February 2023 Responsible Contact Person Christopher O’Brien, Vice President - OESC UI

Finding Number 2023-031 Subject Heading (Financial) or AL no. and program name (Federal) #17.225 Unemployment Insurance Planned Corrective Action OESC concurs with the audit finding and agrees with the recommendation. The agency also acknowledges the importance of data integrity in submitting the ETA 9050, ETA 9052 and ETA 9055 reports. Programming was completed in June 2023 to retain backup of the detailed data at the time each report is run. As part of OESC’s technology modernization efforts, technical resources continue to review reporting requirements for all regulatory reports and validate the accuracy of programming that supports such reporting. DOL completed a Data Validation monitoring of OESC in May 2024, and the DOL reviewers shared favorable comments regarding OESC’s modernization efforts, and the agency was able to satisfy DOL with regard to the area of concern and finding identified in their review. OESC leadership expects to address the underlying causes for this finding as part of our modernization efforts. Anticipated Completion Date Programming completed in June 2023 to retain backup data; data validation for regulatory reports is ongoing as part of OESC technology modernization efforts. Responsible Contact Person Michelle Britten, Chief Administrative Officer

Finding Number 2023-201 Subject Heading (Financial) or AL no. and program name (Federal) 12.401: National Guard Military Operations and Maintenance Projects Program Planned Corrective Action OMD agrees with the auditors’ finding that OMD could not locate or provide the proper documentation to verify the federal cost share for maintenance personnel assigned to Appendix 1. The CFO will request an updated personnel listing from the federal Director of Engineering for state employees authorized federal reimbursement through Appendix 1 as well as the supporting documentation to validate the allowable costs for reimbursement. These source documents will be maintained in the Appendix 1 files on the Oklahoma National Guard shared portal for the required records retention period with training provided to OMD staff on where to locate the documents. Anticipated Completion Date Beginning of new fiscal year—July 1, 2025 Responsible Contact Person Angela Tackett, CFO

Finding Number 2023-044 Subject Heading (Financial) or AL no. and program name (Federal) CN CLUSTER – SCHOOL BREAKFAST PROGRAM; NATIONAL SCHOOL LUNCH PROGRAM, SPECIAL MILK PROGRAM FOR CHILDREN, FRESH FRUITS AND VEGETABLES PROGRAM AL #10.553, 10.555; 10.556; 10.559; 10.582 Planned Corrective Action Child Nutrition programs can modify the claim and reporting systems to pull information for all payments meeting the FFATA reporting requirements for funds paid in excess of $30,000 cumulatively annually to a subrecipient. However, we cannot give a corrective action plan for the actual upload to US Spending.com due to the discontinuation of the FSFR website used to upload FFATA reports on March 6th, 2025. This is being replaced by SAM.gov utilizing an API process. There is currently no guidance to States on how this will done once the new API process is ready to be implemented. Once we have guidance on how the information will be collected and uploaded, we can work with OMES to create an upload and reconciliation process. Anticipated Completion Date July 1, 2025, or when the US Spending system update is available. Responsible Contact Person Jennifer Weber

Finding Number 2023-015 Subject Heading (Financial) or AL no. and program name (Federal) CN CLUSTER – SCHOOL BREAKFAST PROGRAM; NATIONAL SCHOOL LUNCH PROGRAM, SPECIAL MILK PROGRAM FOR CHILDREN, FRESH FRUITS AND VEGETABLES PROGRAM AL #10.553, 10.555; 10.556; 10.559; 10.582 Planned Corrective Action We will update our 3-month Operating Excess form we send to schools to include more information. Any schools that are going to carryover part or all of their excess funds will need to provide us an explanation of what those funds will be spent on and then comments will be made on the log so we follow-up with the school to ensure allowable items were purchased. If they are using the excess for salaries and/or the cost of serving all students free they will need to let us know that in writing as well. Anticipated Completion Date June 2, 2025 Responsible Contact Person Jennifer Weber

Finding Number 2023-105 Subject Heading (Financial) or AL no. and program name (Federal) 10.542 - Pandemic EBT – Food Benefits Planned Corrective Action The P-EBT program is no longer issuing benefits. Should a similar program be required in the future, the DHS will ensure internal controls are in place to avoid duplicate or erroneous payments. Anticipated Completion Date N/A Responsible Contact Person Sondra Shelby

Finding Number 2023-007 Subject Heading (Financial) or AL no. and program name (Federal) 10.542 – Pandemic EBT – Food Benefits Planned Corrective Action In February 2025, the Oklahoma SNAP unit transitioned to new leadership with the appointment of a new Program Administrator (PA). During the transition, previous issues related to the FNS 292B report were identified and addressed. New procedures have been implemented to ensure future reports are accurate and properly reviewed. Moving forward: • The SNAP Program Field Representative will enter the data for the FNS 292B report and notify the Program Administrator once the report is completed. • The Program Administrator will then review the data and information entered for accuracy. • After confirming the information is correct, the Program Administrator will certify the report in FPRs as appropriate. The new Program Administrator has access to FPRs and is authorized to certify the data. These steps have been put in place to ensure the integrity and timeliness of the FNS 292B report moving forward. Anticipated Completion Date Already completed Responsible Contact Person Amy Roberts

CONDITION: During the calendar year 2023, the City did not utilize a formal general ledger system of accounting to track the financial activity (financial position and results of operations) for several ‘Funds’ held at the City. The activity of these funds is either 1) maintained in spreadsheet fashion similar to a checkbook used in personal finances, 2) recorded partially (expenses only with no revenue), or 3) not tracked at all. As these funds are not maintained using the City’s accounting software package, management does not have the ability to efficiently generate financial reports necessary to provide management with the proper fiscal oversight. This condition included the American Rescue Plan Act (ARPA) funding known as the Coronavirus State and Local Fiscal Recovery Fund. However, it should be noted that City personnel were able to prepare spreadsheets to document which expenditures were utilized to prepare the necessary quarterly reporting requirements to the Department of Treasury. This is a repeat finding (2022-002) from the prior year. CRITERIA: Prudent internal control procedures in the areas of general ledger management and financial reporting include maintaining a formal general ledger system of accounting to track the activity of all ‘Funds’ maintained by the City. In specific as it relates to federal programs, Section 2 CFR 200.403(g) of the Uniform Guidance requires that federal costs must be adequately documented which would include the maintaining of a formal general ledger system of accounting for all ‘Funds’ of the City. MANAGEMENT’S CORRECTIVE ACTION PLAN: Management of the City will assess the current workload and expertise of the City’s business office personnel in an effort to determine a feasible timeframe to continue the process of creating a formal general ledger system of accounting for all City ‘Funds’ that are not already entered into the software accounting system. The timeframe for completion of this review will occur during the first nine months of calendar year 2025 with the intention of having the City be in full compliance with Section 2 CFR 200.403(g) of the Uniform Guidance which requires federal costs to be adequately documented which would include the maintaining of a formal general ledger system of accounting for all ‘Funds’ of the City.

Finding Number: 2023-044 Finding Name: Inaccurate Information Included in the Financial Reports Finding Condition(s): The Illinois Department of Transportation (IDOT) did not prepare accurate federal financial status reports for the Airport Improvement Program. Name of Contact Person(s): • Melanie Quinn, Contracts Section Manager – Illinois Department of Transportation, Division of Aeronautics • Joe Segobiano, Bureau Chief of Administrative Services – Illinois Department of Transportation, Division of Aeronautics Corrective Action(s): IDOT is working to fully staff and train the Contracts Section of the Division of Aeronautics to ensure reporting is completed as required. Proposed Completion Date: June 30, 2026

Finding Number: 2023-041 Finding Name: Inadequate Process for Preparing ETA 2208A Special Report Finding Condition(s): The Illinois Department of Employment Security (IDES) does not have an adequate process in place to ensure the ETA 2208A special reports prepared for the Unemployment Insurance (UI) program are complete and accurate. Name of Contact Person(s): • Linette Hughes, Budget Director – Illinois Department of Employment Security, Office of the Budget • Belinda Moreno, State Budget Manager – Illinois Department of Employment Security, Office of the Budget • Anna Hrynewycz, Federal Budget Manager – Illinois Department of Employment Security, Office of the Budget Corrective Action(s): The IDES hired additional budget staff to aid in compiling and checking the reports to ensure complete and accurate reporting. Additionally, the IDES created and approved written procedures for the completion of the reports. Proposed Completion Date: July 1, 2024 - Completed

Finding Number: 2023-040 Finding Name: Inadequate Process for Preparing ETA 9130 Financial Reports Finding Condition(s): The Illinois Department of Employment Security (IDES) does not have an adequate process in place to ensure that the ETA 9130 financial reports prepared for the Unemployment Insurance (UI) program are complete and accurate. Name of Contact Person(s): • Kelly McGrath, Manager of Accounting and Reporting – Illinois Department of Employment Security, Accounting and Reporting • Briant Coombs, Manager of Accounting Service – Illinois Department of Employment Security, Accounting and Reporting Corrective Action(s): The IDES’ accounting staff will review its reporting procedures and determined ways to improve its controls over its reporting preparation, reviews, and approvals. Furthermore, the IDES will hire additional staff to aid in the ETA 9130 reporting process. Additionally, the IDES will look for ways to strengthen its internal controls over multiple IDES departments to ensure the data is complete and accurate. Finally, the IDES anticipates that, in coordination with the Illinois Department of Innovation and Technology (DoIT), the IDES’ reporting tools will be improved and/or modernized. Proposed Completion Date: December 31, 2025

Finding Number: 2023-039 Finding Name: Failure to Complete UI BAM Case File Reviews Within Required Timeframes Finding Condition(s): The Illinois Department of Employment Security (IDES) did not complete the Benefit Accuracy Measurement (BAM) case file reviews in accordance with United States Department of Labor (USDOL) requirements for the Unemployment Insurance (UI) program. Name of Contact Person(s): • Dureyl Tyson, Benefit Accuracy Measurement Unit Manager – Illinois Department of Employment Security, Quality Assurance and Compliance • Charles Young, Quality Assurance & Compliance Manager – Illinois Department of Employment Security, Quality Assurance and Compliance Corrective Action(s): The IDES’ BAM Unit has instituted two internal controls to help with timeliness of case completion. First, a weekly activity report introduced to show past due cases. This report shows all activities, letters generated to the claimants, employers, and any associated parties; interviews; follow up with any parties to complete necessary documents; and any adjudication needed for each case. This report allows the case manager to adequately review and make recommendations towards case completion. Second, the IDES instituted two types of reminders to monitor case completion. The first type of reminders introduced by the IDES are sent for any cases that are past due. Additionally, the IDES started sending reminders that are sent for any cases due the upcoming week along with any cases closed but that have not been reviewed by the case managers. Both the weekly activity reports and the reminds allow the BAM manager to see which investigators needed more guidance in completing their cases. These activities also showed the need to find coachable moments in each investigation to help with completion, such as, analyzing information, coding, and completing the summaries, etc. Proposed Completion Date: June 30, 2024 – Completed

Finding Number: 2023-038 Finding Name: Failure to Follow Established Procedures to Determine Beneficiary Eligibility Finding Condition(s): The Illinois Department of Employment Security (IDES) failed to follow established policies when making eligibility determinations for claimants of the Unemployment Insurance (UI) program. Name of Contact Person(s): Mireya Hurtado, Deputy Director of Service Delivery – Illinois Department of Employment Security, Service Delivery Bureau Corrective Action(s): Temporary Disabling of Certain IBIS Checks – Since April 16, 2024, all edit checks have been fully operational. Furthermore, the IDES has made procedural changes to address eligibility determination issues, including the establishment of regular health checks of the Illinois Benefits Information System (IBIS) system. Internal Controls Established to Ensure Timely Changes to UI Eligibility Procedures – In October 2023, the IDES resumed investigations of potential refusal of work issues. Additionally, all impact cross analyses were restored, as all online claim filing functionalities changed during the pandemic period. As of July 2025, the IDES had confirmed that the internal controls were in place and active. Established Monitoring Tools and Reports for Future Needs – As of March 31, 2025, the IDES established a report that allows the IDES to identify potential staff errors, the staff member in question, and the staff member’s home office. As of July 2025, the IDES ensured that key performance indicators were in place for service delivery, including Field Operations and the UI Program. Furthermore, the IDES had created the following internal controls: • Field Operations created a statewide Error Tracking spreadsheet that allows errors made on the claims and in adjudication to be reported to the appropriate regions/managers and allows errors to be assigned as tasks for the regions to work with the staff for correction and training. • UI Support managers frequently review the IBIS reports to spot check adjudication issues to ensure that they are being completed appropriately and review the End Date report to ensure that staff are using the appropriate end dates for their determinations. In addition, the IDES has daily reports that are scheduled to review that claims and adjudication issues are being handled correctly. • IDES developed a Quality Review process and report for Process Protest assignments, ensuring that protests are addressed appropriately. • Claims/adjudication dashboard is in development to further assist the IDES in this effort. Establish Training for Staff – The IDES is dedicated to ensuring that all areas have the training and resources needed to build upon current procedures and processes. To this end, the IDES is dedicating resources to develop and implement training. The agency has also realigned the Employee Engagement and Training Unit to Human Resources, where it can better identify individual employee training needs. As of July 2025, the IDES confirmed that a centralized training curriculum and system is in place for Field Operations, in collaboration with UI Program and other relevant business units within IDES. Furthermore, the IDES is conducting the following ongoing tasks: • The Service Delivery (SD) and the UI Training Team continues to update current training to ensure that the most up to date information is provided to staff. • The IDES is creating new training. An example is the Benefit Charging System (BCS) training for UI Revenue Analysts II. • The IDES is looking at common errors and confusing/difficult processes for staff, and prioritizing training to remedy those errors moving forward. • The IDES has added another UI Trainer. • SD (UI Program and UI Support managers) work alongside the training team to ensure the IDES dedicates the appropriate staff and adding more resources towards its training efforts Proposed Completion Date: June 30, 2025 – Completed

Finding Number: 2023-032 Finding Name: Failure to Report Subaward Information Required by FFATA Finding Condition(s): The Illinois Department of Public Health (IDPH) failed to report information required by the Federal Funding Accountability and Transparency Act (FFATA) for awards granted to subrecipients of the Immunization Cooperative Agreements (ICA) and the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) programs. Additionally, the IDPH not establish control procedures to submit FFATA reports for all subawards as required by federal regulations until June 2023. As a result, FFATA reports were not prepared or submitted for any subawards of the ICA and ELC programs for the period July 1, 2022, through May 31, 2023. Additionally, we noted that IDPH did not establish control procedures to submit FFATA reports for subawards as required by federal regulations for the period June 1, 2023, through June 30, 2023. Name of Contact Person(s): • Shelia Jefferson, Acting Deputy Director – Illinois Department of Public Health, Office of Performance Management • Timothy Stevens, Grant Management Auditor – Illinois Department of Public Health, Office of Performance Management Corrective Action(s): The IDPH’s Office of Performance Management (OPM) identified that there was a lack of compliance among grant managers in completing the required FFATA reporting and developed a Standard Operating Procedure (SOP) for FFATA reporting to address the gap and improve the process. The SOP was developed and tested from May through June 2023 and officially implemented in July 2023. The SOP was subsequentially enhanced on July 31, 2024, to accurately reflect obligation/action dates. The new process involved downloading all award information from the grant management system, the Electronic Grants Administration & Management System (EGrAMS), and having the OPM conduct a monthly batch upload of the data. When the policy was implemented, the IDPH ensured that all awards from fiscal year 2020 onward were reported, and that going forward, all subawards would be submitted within the required timeframe. Additionally, the OPM discovered that the obligation/action dates on the reports were being automatically generated based on the dates the signed Uniform Grant Agreements (UGA) were uploaded into EGrAMS, instead of the actual dates the agreements were signed. To correct this, the OPM worked with EGrAMS to add a field where grant managers would manually enter the dates the awards were signed when uploading the UGAs. Proposed Completion Date: July 31, 2024 – Completed

Finding Number: 2023-031 Finding Name: Inaccurate Special Report Finding Condition(s): The Illinois Department of Commerce and Economic Opportunity (DCEO) did not maintain supporting documentation for key line items or prepare accurate special reports for the Low-Income Home Energy Assistance Program (LIHEAP). Additionally, the DCEO has not established appropriate internal controls to ensure its quarterly reports submitted to USDHHS are properly supported in accordance with federal requirements. Finally, the DCEO’s supervisory review procedures have not been designed to operate at a level of precision to identify errors of the size and nature noted above. Name of Contact Person(s): Ben Moore, Fiscal Operations Manager – Illinois Department of Commerce and Economic Opportunity, Office of Community Assistance Corrective Action(s): The DCEO’s Office of Community Assistance (OCA) has implemented a process for an independent verification by a second OCA staff member of the correct data entry prior to submission of obligated funds for all future LIHEAP quarterly reports. Proposed Completion Date: February 25, 2025 – Completed

Finding Number: 2023-030 Finding Name: Failure to Communicate Award Information to Subrecipients Finding Condition(s): The Illinois Department of Commerce and Economic Opportunity (DCEO) did not follow its established policies and procedures for monitoring subrecipients of the Low-Income Home Energy Assistance Program (LIHEAP). Name of Contact Person(s): Ben Moore, Fiscal Operations Manager – Illinois Department of Commerce and Economic Opportunity, Office of Community Assistance Corrective Action(s): There is currently a process in place to enter the correct Federal Award Identification Number (FAIN) from the federal award notice into the DCEO’s e-Grants system, which populates into all grant agreements created and issued for that grant series. To ensure the correct FAIN is entered, the Office of Community Assistance (OCA) added a step in its grant series establishment process to verify that the correct FAIN is entered into e-Grants prior to any grants being issued from that award. Proposed Completion Date: February 25, 2025 – Completed

Finding Number: 2023-028 Finding Name: Failure to Perform Cash Draws in Accordance with the Treasury-State Agreement Finding Condition(s): The Illinois Department of Commerce and Economic Opportunity (DCEO) did not perform its cash draws in accordance with the funding technique prescribed in the Treasury-State Agreement (TSA). Name of Contact Person(s): • Lisa Clement, Audit Liaison – Illinois Department of Commerce and Economic Opportunity, Office of Accountability • Megan Buskirk, Interim Chief Accountability Officer – Illinois Department of Commerce and Economic Opportunity, Office of Accountability • Phil Keshen, Deputy Director – Illinois Department of Commerce and Economic Opportunity, Office of Financial Management Corrective Action(s): The DCEO’s Office of Financial Management (OFM) has requested that the Governor’s Office of Management & Budget (GOMB) change the funding technique for the Low-Income Home Energy Assistance Program within the Treasury-State Agreement to Pre-Issuance. This has been confirmed and will be in the agreement for fiscal year 2025. Proposed Completion Date: August 30, 2024 – Completed

Finding Number: 2023-027 Finding Name: Failure to Re-certify to the Accuracy of the Clearance Pattern Finding Condition(s): The Illinois Department of Commerce and Economic Opportunity (DCEO) did not properly review or re-certify the accuracy of the clearance pattern specified in the Treasury-State Agreement related to cash draws for the Low-Income Home Energy Assistance Program (LIHEAP). Name of Contact Person(s): • Lisa Clement, Audit Liaison – Illinois Department of Commerce and Economic Opportunity, Office of Accountability • Megan Buskirk, Interim Chief Accountability Officer – Illinois Department of Commerce and Economic Opportunity, Office of Accountability • Phil Keshen, Deputy Director – Illinois Department of Commerce and Economic Opportunity, Office of Financial Management Corrective Action(s): The DCEO’s Office of Financial Management (OFM) has requested that the Governor’s Office of Management & Budget (GOMB) change the funding technique for the Low-Income Home Energy Assistance Program within the Treasury-State Agreement to Pre-Issuance. This has been confirmed and will be in the agreement for fiscal year 2025. Furthermore, the OFM will develop policies and procedures to comply with the appropriate funding technique. Proposed Completion Date: August 30, 2024 - Completed.