Corrective Action Plans

Auditor's Recommendation: The auditor recommends the Organization enhance the design of its control activities and procedures over the allocation percentage forms used throughout the year to ensure the staff know how to apply percentages and are using the correct approved allocation form for the period in the year. Management’s Response: A process was implemented in fiscal year 2024 to address this issued and included the following: • The allocation form was updated and is now clearly labeled with the period and type of expense for which it applies. • The Executive Director communicated the revision of all forms to staff involved in the allocation process, followed by a training session to ensure understanding and proper application of the form. • A monthly review of the process, whereby allocation forms were audited for current updates and application consistency. Due date of completion: August 31, 2024 Responsible Official: Executive Director, Michelle Crain

Management agrees with the finding and is implementing the accompanying corrective action plan. Views of Responsible Officials: Ryan Edward, Finance and Operations Manager Name, Title: Simone Auger, Director of Operations Contact Person: Simone Auger Director of Operations   Corrective Action Plan: Employees are required to comply with the NAIHC Financial Procedures. I. PROCUREMENT PROCEDURES 1. Determination of Needs The determination of needs for goods and services will be made by qualified individuals, and according to organizational guidelines, adequate quantities, timely receipt, proper specifications, and desired quality will be considered. Those guidelines shall include that the cost be reasonable in amount, properly documented, and within the budgetary authorization of the contract. If the transaction involves federal funds, the cost must also be allowable per the terms of Subpart E of the Uniform Grant Guidance. The guidelines must also consider and avoid the disruption of program operations because of improper purchases, as well as potential losses caused by excessive purchases. 2. Methods to Determine Needs Purchasing requirements, categorized by the type of goods or service, will be determined according to the following methods: 1. The need for services that are provided on a recurring basis by the same vendor, such as utilities and telephone, will be determined initially by the accounting staff or by the Program Manager when services are program-specific. Thereafter, these services can be provided continuously or not predetermined until the end of the contract period. See “Accounts Payable for specifications on processing these types of vendor payments. 2. Determining the need for routine goods and services (items that are commonly used in the delivery of program and administrative services) will be the responsibility of the Program Directors and Executive Director. 3. Determining the need for specialized services, such as insurance, legal, or consulting services, will be the responsibility of the Executive Director. 4. The employees will identify the need for occasional goods and services and have their direct supervisor approve it before the Executive Director approves it. 3. Preparation of Requisitions for Routine Goods and Services A. Prior approval of purchases is documented by the Purchase Requisition form. Under normal circumstances, employees are required to prepare a Purchase Requisition for approval before making a purchase commitment. Procedures for doing so are listed below. If obtaining prior approval is not possible, an employee, at his or her discretion, may make a purchase and request reimbursement. However, if the purchase is not approved by their supervisor and the Executive Director, the employee becomes responsible for returning the items purchased or paying for them. If a rejected purchase was made using an NAIHC credit card, the employee will be responsible for reimbursing NAIHC. B. Purchase Requisitions for routine goods and services will be prepared by the employee and submitted directly to the Finance and Operations Manager for review for completeness, accuracy, budgetary authorization, allowability, and reasonableness. Purchase Requisitions will contain all the following information: 1. Vendor name and address. 2. Type of Request. Specify whether the request is for goods, services, a blanket purchase order, or are amending an existing purchase order. 3. Ship-to address. If there is a legitimate reason to have the goods shipped directly to your program’s offices, specify that location here. Otherwise, leave this section blank so that the shipment will be delivered to the NAIHC office. Note that if you choose to be the receiver of the goods, you are responsible for verifying the items received and their condition and forwarding the necessary paperwork to Purchasing. 4. Will Call. Check this box to see if the purchase order is to be hand-carried to the vendor. 5. Date required and special instructions (if any). Specify the date that the requested items are needed. Always include this information—it will assist the accounting department in determining priorities. Be sure to provide as much lead time as is practical by determining needs as far in advance as possible.   6. Provide all the following information where applicable: description of items or services being requested, catalog number, quantity, units, unit cost, and total amount for each item ordered. In instances where the total cost is uncertain, use the best estimate available, preferably in the form of a “not to exceed” amount. 7. Charge-to Account. Specify the NAIHC line item(s) to be charged. 8. Signatures of the Requestor and the Supervisor. 9. Date requested. This is the date that the requisition was prepared. 1. Once the Supervisor and the Executive Director have signed the Purchase Requisition, a purchase can be made, and the office administrator will receive any corresponding invoices. 2. Approved purchases made by credit card will require the credit card holder to include corresponding invoices or receipts in the monthly credit card payment packet. 4. Initiation of Requests for Proposals for Specialized Services A. The Executive Director will initiate requests for Proposals for specialized services. B. If the goods or services are complex, highly technical, or require a formal request for proposal, an appropriate contract will be prepared. The contract will be considered executed when the NAIHC Executive Director and the contractor have provided original signatures on the contract documents. One copy of the contract with original signatures will remain with the NAIHC contract files, and one copy will be provided to the contractor. 5. Initiation of Requisitions for Plant, Property, and Equipment A. Requisitions for fixed asset additions will be initiated by programs in accordance with guidelines for Additions to Plant, Property, and Equipment in §900 of the NAIHC Financial Policies approved by the Board.   6. Placement of Orders Requisitions for purchases will be reviewed to ascertain that the requisition amount is within budgetary parameters. Purchase orders will be made on approved purchase order forms and reviewed for correctness and completeness. Approval of the Purchase Requisition and generation of a Purchase Order will occur prior to the establishment of a firm order. Copies of the Purchase Order and all supporting documentation will be filed to allow for timely follow-up on uncompleted orders. 7. Establishment of Purchasing/Procurement Guidelines Quality, integrity, broad-based competition, and increased economy and efficiency in the procurement process are essential. This policy also establishes a maximum threshold for procurement of equipment, materials, supplies, and services authorizing NAIHC's Executive Director to expend without prior approval of NAIHC Board of Directors. The procurement limit approved by the Board of Directors for Executive Director is set at $150,000. Purchases and contracts for services exceeding $150,000 will need prior approval of the Board of Directors. Purchasing and contracting shall be conducted in accordance with the following procedures: A. Non-competitive Small Procurement Orders For procurement orders under $10,000, competition is preferred, but is not required. Procurements over the small procurement limit that are not executed through a competitive process must include a written justification for why a competitive method has not been used. The justification must include a verification that the price is fair and reasonable and is from a responsible vendor, has the capability in all respects to perform fully the contract requirement, and has the integrity and reliability to assure good faith performance.   B. Competitive Procurement Orders Generally, NAIHC shall select the vendor with the most competitive bid. If NAIHC management has reason to believe that the most competitive source may fail to provide the goods or services needed due to inferior quality, untimely delivery, or a similar cause, NAIHC management is authorized to select the next most competitive source as long as it’s within 15% of the most competitive source. For orders exceeding $10,000, at least three competitive bids, proposals, or quotes shall be sought by:  Telephone inquiry or  Advertisement, or  Mailing invitations to bid suppliers known to NAIHC management, board members or TDHEs, or  a combination of the above. Adequate records shall be kept for competitive orders and may include the following:  Name of purchaser and, if applicable, direct supervisor.  Solicitation documentation, including the names of vendors, copies of any written responses received, or an explanation for a single bid response.  Copy of certification by appropriate director/administrator indicating fund availability to satisfy contractual requirements.   C. Sole Source Procurements Procurement without competition is authorized under limited conditions and subject to written justification documenting the conditions that preclude the use of a competitive process. If the appropriate Program Director/Program Manager determines that there is only one source that will satisfy the requirements and/or circumstances present, the Program Director/Program Manager may, with the approval of the Executive Director, negotiate and award a contract without competition to the sole source. Reasonable steps shall be taken to avoid using sole source procurement except in circumstances where it is both necessary and in the best interest of NAIHC. D. Emergency Procurement When an emergency condition exists (to be determined by the Executive Director) that prevents the use of formal competitive procurement methods in awarding a contract or purchasing goods deemed essential to NAIHC, emergency procurement may be negotiated on a sole source or limited competition basis as dictated by the circumstances surrounding the emergency. The emergency procurement shall be limited to the procurement of only the types of items and quantities or time periods sufficient to meet the immediate threat and shall not be used to meet long-term requirements. Exclusions:  Any Federal, State, or private grant, contract, gift, or endowment with specific terms or requirements.  Agreements creating contractual employee relationships.  Any procurement or contract to the extent of any conflict with a governing federal law, regulation, or other requirement. Anticipated Completion Date: January 1, 2024

ALN Number and Name: Not applicable Significant deficiency Management’s Planned Corrective Action: Disagree: We have established a cost center or “Department” for each federal program that clearly identifies federal expenditures. Our funders request monthly copies of receipts and payment issued to verify expenses. Responsible Party: Beaulieu Accountancy Corporation, Accountant Completion Date: 9/25/2024

Finding #SA2023-001 Cash Management and Accuracy of Federal Financial Reports Assistance Listing Number: 20.507 Assistance Listing Title: COVID-19 – Federal Transit Formula Grants Name of Federal Agency: Department of Transportation Federal Award Identification Number: CA-2020-212-00 and CA-2022-083-00 • Name(s) of the contact person: Shay Narayan, Director of Finance • Corrective Action Plan: There was significant turn-over in the Finance Department during the periods where accounting and spending of COVID-19 related grants occurred. There was a lack of monitoring reimbursement claim activities and coordination with the Transit Division on its activities. With the Finance Department being fully staffed with competent talent, these issues should not occur in the future. • Anticipated Completion Date: 08/31/2025

2023-004 Activities Allowed or Unallowed – Interprogram Activity Public and Indian Housing – CFDA Number 14.850 Other Matters, Questioned Costs Condition: The Authority has loaned monies from the Public and Indian Housing Program to the COCC. As of September 30, 2023 these loans totaled $349,352. Recommendation: The Authority should develop a plan based on budgeting and monitoring of COCC expenses to have the ability to reimburse funds to the Public and Indian Housing Program. Action Taken: To restore financial integrity and ensure proper use of COCC funds, the Authority will take the following actions: 1. COCC Optimization and Budget Reform: Develop and implement a proper, balanced COCC budget that reflects actual operating costs and allocates shared services appropriately. Establish budget accountability protocols, including monthly budget-to-actual reviews and variance reporting to the CFO, CEO, and Board. 2. Training and Capacity Building: Provide training for finance staff on COCC operations, HUD’s Asset Management model, and best practices for cost allocation and shared services. Engage external consultants to support financial modeling and long-term sustainability planning for RAD and LIHTC properties. 3. Shared Services Agreement: Formalize a Consulting and Shared Services Agreement to ensure that COCC services are appropriately billed and reimbursed by other programs. Monitor inter-program transactions to ensure compliance with HUD’s financial management requirements. 4. Salary Allocation and Cost Tracking: Conduct a salary allocation study to ensure that staff time is distributed adequately across programs. Implement time-tracking tools and cost allocation methodologies that align with HUD guidance and OMB Uniform Guidance. Effective Date: June 3, 2025 Contact Information Dr. Michael C. Threatt, Chief Executive Officer Sanford Housing Authority 317 Chatham Street Sanford, North Carolina 27330 (919) 776-7655

The City will periodically review all expenditures of federal awards including subawards received in partnership with the Chickasaw Nation.

Common Origination and Disbursement (COD) Reporting and Reconciliations Planned Corrective Action: Procedures will be implemented to monthly reconcile FDL and Pell disbursements to student accounts with disbursements reported to COD. Person Responsible for Corrective Action Plan: Lee Anders, Vice President for Business Services Anticipated Date of Completion: 09/30/25

Need Analysis Planned Corrective Action: All scholarships will be marked as estimated financial assistance and an awarding check for need will be done accurately before final distribution. Person Responsible for Corrective Action Plan: Lee Anders, Vice President for Business Services Anticipated Date of Completion: 09/30/25

Enrollment Reporting to NSLDS Planned Corrective Action: A process will be created to ensure enrollment is reported timely and accurately. Spot checks of NSLDS will be performed on enrollment status throughout the year. Person Responsible for Corrective Action Plan: Lee Anders, Vice President for Business Services Anticipated Date of Completion: 09/30/25

ISIR Comment Resolution Planned Corrective Action: All ISIR comment codes will be resolved before disbursement of federal aid to students. Person Responsible for Corrective Action Plan: Lee Anders, Vice President for Business Services Anticipated Date of Completion: 09/30/25

Satisfactory Academic Progress Planned Corrective Action: The SAP policy will be reviewed or created as needed and a procedure will be implemented based on that policy. Person Responsible for Corrective Action Plan: Lee Anders, Vice President for Business Services Anticipated Date of Completion: 09/30/25

2023-004 – Allowable Costs relating to Time and Effort and Internal Controls Management’s Corrective Action Plan: Management agrees with the Federal award finding identified in the audit. We acknowledge that a few timesheets and spreadsheets were missing from appropriate files during a two-month period of transition at the Fund, while maintaining that proper allocation process was followed up to the point of record keeping. The Fund understands the reasons for the missing timesheets and that these cases were unique and not indicative of the normal and prevalent internal control over the completion and approval of timesheets. The allocation of payroll for the months tested were based on the consistent and correct application of the payroll costs allocation methodology however in a limited number of cases the allocation spreadsheets weren’t properly saved. After announcement of dissolution, there was considerable staff turnover and rapid transition which created challenges and delays. We did maintain an effective control environment. This has been resolved. Management is saving allocation spreadsheets, and other required documentation as per policy on an ongoing basis.

Taylor Regional Hospital (Hospital) respectfully submits the following corrective action plan for the year ended March 31, 2023. The findings from the March 31, 2023 Schedule of Findings and Questioned Costs is discussed below. The findings are numbered consistently with the numbers assigned in the schedule. FEDERAL AWARD PROGRAMS AUDIT FINDINGS Significant Deficiency (2023-004) Recommendation: The Hospital should immediately fund the Reserve Account to the proper funding level required by the USDA loan. Planned Corrective Action: The hospital agrees with this finding. See 2023-002.

2023-012 Maintenance of Effort (Material Weakness) Management’s Response: Training has been more of a self-learned activity but we are trying to get these done. Working with the auditors helped the most to understand what these reports should look like. The hope is to have 25-26 MOE’s completed in the Fall of 2025. Name of Contact Person and Completion Date: Toni Butterfield Anticipated Completion Date – 10/1/2025

2023-011 Excess Food Service Fund Balance (Material Weakness) Management’s Response: We completed and Excess Balance Use of Funds report and worked with the State to understand exactly the parameters of this/ The funds were spent down and we are working hard to make sure to stay under the three months of expenses as worded in CFR Title 7, 210.14(b). Again management is trying to take on a bigger role as this monitoring was not considered prior to COVID. Fund Balances at year end averaged no more than $10,000. Name of Contact Person and Completion Date: Toni Butterfield Anticipated Completion Date - Immediately

2023-005 - Reporting Corrective Action Plan: Management agrees with the finding and has committed the resources giving rise to the finding. Person(s) Responsible: M. Michael Garza Timing for Implementation: June 30, 2025.

Recommendation – Management and the board should establish a process for regular review of its consolidated financial statements with its contracted accountant to ensure activity is recorded in accordance with GAAP. Auditee's comments – Management and its contracted accounting staff will monitor financial reports and activities of Listening House to ensure proper recording. Name(s) and contact person(s) responsible for corrective action: Molly Jalma, Executive Director. Planned completion date for corrective action plan: Ongoing.

Prepared by: Kevin Jacobs Date Prepared: 7-3-24 Person Responsible for Corrective Action Plan: Kevin Jacobs Jeff Dobson Anticipated Completion Date: 7-3-24 Official's Response: To be clear the documents had to be presented to FEMA to get reimbursement, this was done. The Fiscal Court will endeavor to make sure the FEMA files are updated and complete after FEMA reimbursement.

View of Responsible Official and Corrective Action Plan Heading Home management agrees with this finding and is currently developing controls to ensure compliance with all grant matching requirements. The new controls will address a thorough review of each grant agreement, documentation of matching funds contributed by the organization, including cash contributions, in-kind donations, and volunteer hours, and the method of tracking match progress by either spreadsheet and/or within the accounting system. An appropriate individual will be assigned the responsibility for monitoring compliance and the internal controls over matching compliance including document retention and recordkeeping. Management is confident the match would have been met, but did not maintain the documentation necessary to prove this. Management anticipates the corrective action plan will be fully implemented by July 1, 2025. The personnel responsible for overseeing implementation include Connie Chavez, Chief Executive Officer; Debbie Brickman, Chief Financial Officer; and Armando Sanchez, contract accountant team lead.

We concur with the auditor's findings. We submitted the annual financial report during the period expense reimbursement was received instead of submitting it for the budget periods that ended. We are developing and implementing a grant reporting calendar listing federal financial report (FFR) due dates for all federal grants. We will use the automated alerts from the grants management system to track and remind staff of upcoming reporting deadlines. Lastly, we will maintain audit-ready documentation of each FFR submission.

Action Taken: Management has implemented the following measures to address the issue and prevent future occurrences: • Improved the segregation of duties between the approval, recording and the booking of all expense transactions. • Automated the uploads of credit card transactions directly into the accounting system to prevent any manual manipulation and reconciled the transactions to the statements. • Updated the Association policies around vendor management and allowable/non allowable operating expenses. • We terminated the employee prior to discovering the fraud.

FINDING 2023-011 Finding Subject: Education Stabilization Fund - Reporting Summary of Finding: During the audit period the School Corporation submitted two ESSER I reports, two ESSER II reports, and two ESSER III reports, for a total of six reports. The annual data reports were compiled, prepared, and submitted by the Director of Curriculum without oversight by another individual. All six of the submitted reports were selected for testing. One of the reports, ESSER II, Year 2; was not supported by the School Corporation's records. The School Corporation had expenditures of $583,415 from the ESSER II grant which was not included in this report. Contact Person Responsible for Corrective Action: Drew Cooper, Business Manager Contact Phone Number and Email Address: 765-425-7889 dcooper@shenandoah.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: The Business Manager and Director of Curriculum will review the annual data reports together before submittal. Anticipated Completion Date: September 30, 2024􀀃

FINDING 2023-009 Finding Subject: Child Nutrition Cluster – Non-Profit School Food Service Accounts Summary of Finding: Receipts for the grant were posted to the ledger by one individual without an oversight or review process in place to ensure the remitter, amount, fund, and receipt classification were accurate. Additionally, the same individual received the ACH notifications when monies from monthly meal reimbursements were credited to the School Corporation's bank account and performed the bank reconciliations. Contact Person Responsible for Corrective Action: Drew Cooper, Business Manager Contact Phone Number and Email Address: 765-425-7889 dcooper@shenandoah.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: Currently the Food Service Director and Business Manager hold a monthly financial meeting to review the food service finances. A report listing all receipts for the previous month to the food service fund will be reviewed at this meeting. This item will be added to the agenda. Anticipated Completion Date: March 31, 2024

FINDING 2023-008 Finding Subject: Child Nutrition Cluster – Special Tests & Provisions - Verification Summary of Finding: One individual performs the verification process without documented review/oversight by a second employee not involved in this process. The lack of controls resulted in non-compliance in which the procedures performed at the School Corporation and the resulting supporting documentation provided were insufficient to verify the student's eligibility status of one of three students which were verified during the audit period. Contact Person Responsible for Corrective Action: Drew Cooper, Business Manager Contact Phone Number and Email Address: 765-425-7889 dcooper@shenandoah.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: The verification process will be performed by Pam Frost and reviewed by the Business Manager. Anticipated Completion Date: December 31, 2024

FINDING 2023-007 Finding Subject: Child Nutrition Cluster - Reporting Summary of Finding: Monthly reimbursement claims for breakfast and lunch meals served are prepared and submitted without documented review or approval by a second individual not involved in the preparation of the reimbursement claim. Contact Person Responsible for Corrective Action: Drew Cooper, Business Manager Contact Phone Number and Email Address: 765-425-7889 dcooper@shenandoah.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: The Food Service Director will calculate the monthly claims to be submitted to the DOE/CNP and email this information to the Business Manager for review before submittal. Anticipated Completion Date: March 31, 2024