Corrective Action Plans

Finding 1220160 (2025-001)

Material Weakness 2025

DC

Eligibility Reporting Matching / Level of Effort / Earmarking § 200.303

The Department of Human Services (DHS) and Department of Health Care Finance (DHCF) DC Access System (DCAS) team agree with the findings. For the twelve (12) findings, DHS/ESA has identified the description of the deficiencies, examined the magnitude and geographic extent of the deficiencies, identi...

The Department of Human Services (DHS) and Department of Health Care Finance (DHCF) DC Access System (DCAS) team agree with the findings. For the twelve (12) findings, DHS/ESA has identified the description of the deficiencies, examined the magnitude and geographic extent of the deficiencies, identified the actions completed to eliminate the deficiencies. The District will focus on efforts that will create the maximum impact, which includes creating new options for collaboration, streamlining current communication, and introducing cross-functional prioritization. These strategies will help the District move projects toward completion and are rooted in continuous quality improvement. To guide its strategic efforts and track its impact, DHS has outlined the following four phases of corrective action plans to be taken to ensure the deficiencies will be eliminated: • Review and Prioritization, • Design and Development, • Implementation, and • Monitor and Evaluation. Each phase has several process steps including a completion document that signals the permission to move to the next phase. The detailed process steps are documented under DHS’ Consolidated Semi-Annual SNAP Advance Warning Letter Corrective Action Plan and FFY2026 Quality Control Corrective Action Plan reports. The corrective action plan is facilitated by the Quality Improvement Program and since implementing this process in January 2021, the District has identified root causes for errors and gaps in internal auditing and evaluation processes. Therefore, the flow of the semi-annual corrective action plans reflects the District’s commitment to a collaborative corrective action plan - expanding the data analysis section to include data and analysis of internal methods, a complete summary of each phase completed, and a timeline for upcoming phase/project completion.

View Audit 405318

Finding 1220157 (2025-001)

Material Weakness 2025

United Planning Organization

DC

Allowable Costs / Cost Principles Questioned Costs Period of Performance § 200.309

FINDING – Federal Award Finding 2025-001: Agency: U.S. Department of Health and Human Services (CSBG) Program: Community Service Block Grant (AL No. 93.569) Significant Deficiency and Noncompliance over Allowable Costs / Period of Performance Repeat Finding: No Condition: During our testing over all...

FINDING – Federal Award Finding 2025-001: Agency: U.S. Department of Health and Human Services (CSBG) Program: Community Service Block Grant (AL No. 93.569) Significant Deficiency and Noncompliance over Allowable Costs / Period of Performance Repeat Finding: No Condition: During our testing over allowable costs, we identified 2 transactions in the amount of $38,225 that were incurred in fiscal years 2022 and 2023; however, those costs were recorded as federal expenditure and revenue in fiscal year 2025. The current CSBG grant covering fiscal year 2025 covers the period October 1, 2024 – September 30, 2025, as such, those costs were recorded outside of the period of performance and as such are unallowable. Recommendation: We recommend that management strengthen controls over the timing of federal expenditure recognition to ensure costs are recorded in the proper period of performance. Additionally, the entity should implement procedures to review and reconcile expected expenses to actual invoices received on a periodic basis to ensure all vendor invoices have been timely received. Auditee Response and Corrective Action Plan: UPO has recently implemented two methods for procuring goods and services to address the noted condition. Use of the P-Card for micropurchases and the Purchase Request for larger purchases. P-Card purchases will allow recurring vendor invoices and payments to be captured in real time and recorded in the appropriate billing and funding period. Mandatory use of Purchase Request/PO for all other purchases, to allow the program and finance team to monitor invoices and obligations, and record them within the funding period.

View Audit 405313

Finding 1220156 (2025-001)

Material Weakness 2025

Memorial Hospital at Gulfport

MS

Internal Control / Segregation of Duties Subrecipient Monitoring Allowable Costs / Cost Principles § 200.303 § 200.430

Management’s Action Plan: Management concurs with the findings. The deficiency was due to a lapse in management oversight related to the review and approval of independent contractor timesheets. To strengthen internal controls and ensure compliance with federal requirements, management has implement...

Management’s Action Plan: Management concurs with the findings. The deficiency was due to a lapse in management oversight related to the review and approval of independent contractor timesheets. To strengthen internal controls and ensure compliance with federal requirements, management has implemented corrective actions through the full implementation of a new enterprise resource planning system, Fusion. Under this process, all timecards are now entered, reviewed, and approved directly within Fusion and cannot be processed for payment unless they have been formally approved by appropriate management personnel. This ensures proper documentation, accountability, and adherence to internal control policies. Name of Person Responsible for the Plan: Katherine Hill, Manager of Accounting Jason Lynn, Vice President of Finance and Controller Anticipated Completion Date of the Plan: Completed – fully implemented with the rollout of the Fusion system (May 2025).

View Audit 405309

Finding 1220116 (2025-006)

Material Weakness 2025

Scotts Bluff County School District No. 16 Gering Public Schools

NE

Questioned Costs Reporting Matching / Level of Effort / Earmarking § 200.512

All programs Recommendation: We recommend the District implement procedures to monitor audit reporting deadlines and ensure the data collection form and reporting package are submitted to the Federal Audit Clearinghouse within the required timeframe. Explanation of disagreement with audit finding: T...

All programs Recommendation: We recommend the District implement procedures to monitor audit reporting deadlines and ensure the data collection form and reporting package are submitted to the Federal Audit Clearinghouse within the required timeframe. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: We had a different auditing firm and were under the impression they had submitted it. We will ensure we will not be late again and submit it on time. . Name(s) of the contact person(s) responsible for corrective action: Stacy Rodriguez Director of Finance Planned completion date for corrective action plan: September 2025

View Audit 405300

Finding 1220102 (2025-005)

Material Weakness 2025

Scotts Bluff County School District No. 16 Gering Public Schools

NE

Allowable Costs / Cost Principles Questioned Costs Cash Management § 200.302 § 200.303

Child Nutrition Cluster – Assistance Listing No. 10.CNC Recommendation: We recommend the District implement a formal process requiring documented evidence of review and approval of all reimbursement requests prior to submission, such as dated sign-offs or electronic approval records, to strengthen i...

Child Nutrition Cluster – Assistance Listing No. 10.CNC Recommendation: We recommend the District implement a formal process requiring documented evidence of review and approval of all reimbursement requests prior to submission, such as dated sign-offs or electronic approval records, to strengthen internal controls and ensure compliance with Federal requirements. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The District will provide formal documentation by reviewing and signing the claims for approval of reimbursement requests before submission to the state. Name(s) of the contact person(s) responsible for corrective action: Stacy Rodriguez Director of Finance Planned completion date for corrective action plan: September 2025

View Audit 405300

Finding 1220089 (2025-002)

Material Weakness 2025

Northeastern Regional Association of Coastal Ocean Observing Systems

NH

Allowable Costs / Cost Principles Cash Management Material Weakness

Audit Finding Reference Number: 2025 – 002 Finding: NERACOOS recorded federal grant revenue for certain grants related to FY2025 activities in FY2026, based on the timing of reimbursement receipts rather than when the underlying expenditures were incurred. As a result, federal grant revenue and rela...

Audit Finding Reference Number: 2025 – 002 Finding: NERACOOS recorded federal grant revenue for certain grants related to FY2025 activities in FY2026, based on the timing of reimbursement receipts rather than when the underlying expenditures were incurred. As a result, federal grant revenue and related receivables for FY2025 were understated, while revenue in FY2026 was overstated for the related amounts. In addition, this may lead to misstatements in financial reporting if similar cutoff issues occur in future periods. Corrective Action Plan: Develop and implement a formal year-end revenue cutoff checklist specifically for federal grants. The checklist will require a review of all active federal awards within 60 days and then again in 30 days of fiscal year-end to identify allowable expenditures incurred but not yet reimbursed. Establish a procedure to record grant receivables and revenue accruals for identified unbilled costs prior to closing the accounting records each fiscal year. Train the Finance staff responsible for grant accounting on the accrual basis requirements under 2 CFR Part 200 and proper cutoff procedures. Incorporate a supervisory review step into the year-end close process to verify that all grant-related receivables and revenue accruals have been posted before the books are closed. Incorporate the cutoff review into the annual audit preparation timeline and document results for auditor review. Review the FY2025 federal financial reports submitted for CFDA 11.012 to determine whether any amendments or corrections are required, and coordinate with the federal agency as appropriate. Prior to submission of any federal financial reports (e.g., SF-425 Federal Financial Reports), confirm that recorded grant revenue and expenditures reflect all accrued amounts throughout the reporting period. Review draft federal financial reports against the general ledger before submission to verify consistency between reported and recorded amounts. Responsible Official: Jake Kritzer, Executive Director Anticipated Completion Date: September 30, 2026

View Audit 405299

Finding 1220085 (2025-004)

Material Weakness 2025

City of Loxley, Alabama

AL

Procurement, Suspension & Debarment Subrecipient Monitoring Matching / Level of Effort / Earmarking § 200.318

FINDING 2025-004 The City does not have documented procurement policies and procedures in place as required by the Uniform Guidance. Furthermore, the City did not monitor contractor compliance with BABA provisions. Management’s Response The City will adopt documented procurement policies and procedu...

FINDING 2025-004 The City does not have documented procurement policies and procedures in place as required by the Uniform Guidance. Furthermore, the City did not monitor contractor compliance with BABA provisions. Management’s Response The City will adopt documented procurement policies and procedures and monitor contractor compliance with BABA provisions in FY 2026.

View Audit 405294

Finding 1220084 (2025-001)

Material Weakness 2025

POVERTY & SOCIAL REFORM INSTITUTE, INC.D/B/A LEAPS AND BOUNDS FAMILY SERVICES

MI

Allowable Costs / Cost Principles Cash Management Significant Deficiency

Poverty and Social Reform Institute Dba Leaps and Bounds Family Services has updated the policies and procedures for the agency to reflect the Uniform Guidance requirements regarding the process and controls used to administer federal awards. These changes address the issue of non-compliance by form...

Poverty and Social Reform Institute Dba Leaps and Bounds Family Services has updated the policies and procedures for the agency to reflect the Uniform Guidance requirements regarding the process and controls used to administer federal awards. These changes address the issue of non-compliance by formally addressing the roles and responsibilities in writing of who at the agency is responsible for insuring that the Uniform Guidance is followed. The updated policy covers the areas of: allowable costs, cash management, procedures, and conflicts of interest. The new policy will be presented and reviewed for approval at the July 22nd, 2026, board meeting. We believe this corrective action plan will address the non-compliance and bring the agency into full compliance moving forward.

View Audit 405290

Finding 1220034 (2025-001)

Material Weakness 2025

Norfork School District

AR

Internal Control / Segregation of Duties Special Tests & Provisions Matching / Level of Effort / Earmarking

Our district plans to adhere to the Davis-Bacon Act when utilizing federal funding.

View Audit 405229

Finding 1219668 (2025-001)

Material Weakness 2025

City of Long Beach

CA

Matching / Level of Effort / Earmarking Subrecipient Monitoring Questioned Costs § 200.303 § 200.511

Program:HOME Investment Partnerships Program (HOME) Finding:2025-001 Contact Person:April Apodaca Administrative & Financial Services Bureau Manager Community Development Department Phone: (562) 570-6611 Email: April.Apodaca@longbeach.gov Planned Actions: The City has exercised its rights to enforce...

Program:HOME Investment Partnerships Program (HOME) Finding:2025-001 Contact Person:April Apodaca Administrative & Financial Services Bureau Manager Community Development Department Phone: (562) 570-6611 Email: April.Apodaca@longbeach.gov Planned Actions: The City has exercised its rights to enforce compliance with the terms of its contractual arrangement for this standalone developer/owner, which has resulted in the highest levels of legal action. Through its established monitoring and review procedures, City staff identified documents submitted by the developer that appeared to be inaccurate or falsified. This discovery prompted a multi-year investigation and subsequent litigation, undertaken in direct collaboration and response to instructions as directed by HUD. Throughout this period, the City’s investigative and litigation activities have not been historically viewed as compliance concerns, particularly given their necessity in preserving the integrity of the legal process. At every stage, the City has acted consistently with HUD’s directives and the requirements of the applicable contractual framework. During the multi‑year investigation, HUD expressly instructed the City to continue normal program operations to avoid alerting the developer and to maintain the integrity of the ongoing inquiry. The City respectfully asserts that the audit finding is inconsistent with HUD’s guidance and the historical practices necessary to ensure effective enforcement. Since the initial identification of the finding, the City has taken all reasonable corrective actions within its authority to address the issue and mitigate associated risks. These actions include following established monitoring procedures to ensure compliance with HOME program requirements, making repeated documented requests for tenant eligibility records from the developer/owner, and escalating efforts through the City Attorney. This issue is isolated to one developer/owner and sampling for other developers/owners has not identified similar concerns. The City has been transparent about the ongoing litigation involving the standalone developer/owner responsible for maintaining the records and remains committed in resolving this matter and in pursuing additional actions available once the legal proceedings have been concluded.

View Audit 405210

Finding 1219549 (2025-004)

Material Weakness 2025

Mobridge Regional Hospital

SD

Special Tests & Provisions Questioned Costs Subrecipient Monitoring § 200.303

Federal Agency Name: Department of Agriculture Program Name: Community Facilities Loans and Grants Federal Financial Assistance Listing Number: 10.766 Finding Summary: As a part of the audit process, a reclassification entry was made to move an additional 12 months of reserve funds from the cash swe...

Federal Agency Name: Department of Agriculture Program Name: Community Facilities Loans and Grants Federal Financial Assistance Listing Number: 10.766 Finding Summary: As a part of the audit process, a reclassification entry was made to move an additional 12 months of reserve funds from the cash sweep general fund to a separate bookkeeping account. The Hospital had excess cash available to cover the required reserve amount for the fiscal year. Responsible Individuals: Renae Karst, Chief Financial Officer Corrective Action Plan: Management will fund the reserve account from the cash sweep general fund and will monitor the separate bookkeeping account throughout the year to ensure the reserve is properly funded throughout the year as required by the loan documents. Anticipated Completion Date: June 30, 2026

View Audit 405128

Finding 1219546 (2025-003)

Material Weakness 2025

Mobridge Regional Hospital

SD

Reporting Material Weakness Matching / Level of Effort / Earmarking

Federal Agency Name: Department of Agriculture Program Name: Community Facilities Loans and Grants Federal Financial Assistance Listing Number: 10.766 Finding Summary: The Hospital does not have an internal control system designed to provide for a complete and accurate schedule of expenditures of fe...

Federal Agency Name: Department of Agriculture Program Name: Community Facilities Loans and Grants Federal Financial Assistance Listing Number: 10.766 Finding Summary: The Hospital does not have an internal control system designed to provide for a complete and accurate schedule of expenditures of federal awards being audited. Management requested the auditors, Eide Bailly LLP, to assist with the preparation of the schedule of expenditures of federal awards. Responsible Individuals: Renae Karst, Chief Financial Officer Corrective Action Plan: It is not cost effective to have an internal control system designed to prepare the schedule of expenditures of federal awards. We requested that our auditors, Eide Bailly LLP, to assist with the preparation of the schedule of expenditures of federal awards. We have designated a member of management to review the drafted schedule of expenditures of federal awards, and we have reviewed with and agree with the final Schedule of Expenditures of Federal Awards. Anticipated Completion Date: Ongoing

View Audit 405128

Finding 1219175 (2025-003)

Material Weakness 2025

Charter Township of Chesterfield

MI

Questioned Costs Subrecipient Monitoring Allowable Costs / Cost Principles

Written Policies Required by the Uniform Guidance Auditor Description of Criteria, Condition, and Effect: The Uniform Guidance requires a non-federal entity that has expended federal awards for a grant awarded on or after December 26, 2014 to have written policies pertaining to: 1) Payments (draws o...

Written Policies Required by the Uniform Guidance Auditor Description of Criteria, Condition, and Effect: The Uniform Guidance requires a non-federal entity that has expended federal awards for a grant awarded on or after December 26, 2014 to have written policies pertaining to: 1) Payments (draws of federal funds and how to minimize the time lapsing between the receipt of federal funds and the disbursement to contractors/employees/subrecipients) (§200.302(6)); 2) Allowability of costs charged to federal programs (§200.302(7)); and 3) Compensation (personnel and benefits policy) (§200.430 and §200.431). Although the Township has processes in place to cover these areas, there are no formal written policies covering payments, allowability of costs, and compensation. As a result of this condition, the Township did not fully comply with the Uniform Guidance applicable to the above noted grants. Auditor Recommendation: We are aware that the Township is evaluating options using internal and external resources to take corrective action. We recommend that the Township proceed with its selected option as soon as practical, but no later than the end of the next fiscal year. Corrective Action: As noted in the auditor recommendation, the Township is in the process of evaluating a draft grant administration policy, which will address items #1 and #2 (payments and allowability of costs charged to federal programs). Item #3 (compensation) will be addressed via review and modification as needed of the Township’s personnel manual to ensure compliance. Responsible Persons: Karen Trombley, Accounting Coordinator; Sarah Mistretta, Human Resources Director Anticipated Completion Date: December 31, 2026

View Audit 405111

Finding 1219164 (2025-002)

Material Weakness 2025

My Sister's Place, Inc.

DC

Allowable Costs / Cost Principles Matching / Level of Effort / Earmarking § 200.430

Finding 2025-002: Allowable Costs – Payroll Assistance Listing #: 93.671 Recommendation: Deleon & Stang recommends MSP make changes overall its timekeeping processes to ensure that payroll costs accurately reflect work performed and if budget estimates are utilized, that they are reconciled and true...

Finding 2025-002: Allowable Costs – Payroll Assistance Listing #: 93.671 Recommendation: Deleon & Stang recommends MSP make changes overall its timekeeping processes to ensure that payroll costs accurately reflect work performed and if budget estimates are utilized, that they are reconciled and trued up on a consistent basis. Management Response: MSP agrees with the recommendation and remains committed to improving its timekeeping and payroll allocation processes. Management is working with ADP to implement a system that captures actual employee time by program and grant, ensuring payroll costs are accurately charged and supported by documented effort. Until full implementation is complete, periodic reconciliations between budgeted and actual time will be performed. Action Plan: 1. Complete ADP system enhancements that allow employees to record time by department,program, and grant. 2. Establish written procedures requiring staff to allocate hours based on actual workperformed. 3. Implement monthly reviews and reconciliations of payroll allocations against actual timerecords. 4. Train supervisors and employees on the revised timekeeping process. 5. Perform quarterly management reviews of payroll distributions and make necessaryadjustments to ensure compliance with Uniform Guidance requirements. 6. Target full implementation and testing of the enhanced timekeeping system prior to thenext audit cycle.

View Audit 405091

Finding 1219163 (2025-001)

Material Weakness 2025

My Sister's Place, Inc.

DC

Procurement, Suspension & Debarment Matching / Level of Effort / Earmarking

Finding 2025-001: Procurement, Suspension, and Debarment Assistance Listing #: 14.267 Recommendation: Delong & Stang recommend MSP perform its internal processes and retain documentation of the suspension and debarment check in the vendor file as support for vendors who are paid or expected to be pa...

Finding 2025-001: Procurement, Suspension, and Debarment Assistance Listing #: 14.267 Recommendation: Delong & Stang recommend MSP perform its internal processes and retain documentation of the suspension and debarment check in the vendor file as support for vendors who are paid or expected to be paid over $25,000 prior to funds being disbursed. Management Response: MSP agrees with the recommendation and will strengthen its vendor verification process by ensuring that all vendors expected to receive payments of $25,000 or more are screened through SAM and OIG prior to contract execution or payment. Documentation supporting these verifications will be retained in the vendor file and reviewed periodically for compliance. Action Plan: 1. Update the procurement checklist to include mandatory SAM and OIG verification before payment approval. 2. Create a standardized electronic filing system for verification documentation. 3. Train finance and program staff on suspension and debarment requirements. 4. Conduct quarterly reviews of vendors exceeding the $25,000 threshold to ensure compliance and documentation retention. 5. Assign responsibility to the Finance Manager for monitoring and maintaining compliance records.

View Audit 405091

Finding 1219143 (2025-002)

Material Weakness 2025

Monroe County

MI

Questioned Costs Subrecipient Monitoring Allowable Costs / Cost Principles

Written Policies Required by the Unfiform Grant Guidance Auditor Description of Criteria, Condition, and Effect: The Uniform Guidance requires a non-federal entity that has expended federal awards for a grant awarded on or after December 26, 2014 to have written policies pertaining to: 1) Payments (...

Written Policies Required by the Unfiform Grant Guidance Auditor Description of Criteria, Condition, and Effect: The Uniform Guidance requires a non-federal entity that has expended federal awards for a grant awarded on or after December 26, 2014 to have written policies pertaining to: 1) Payments (draws of federal funds and how to minimize the time lapsing between the receipt of federal funds and the disbursement to contractors/employees/subrecipients) (§200.302(6)); 2) Allowability of costs charged to federal programs (§200.302(7)); and 3) Compensation (personnel and benefits policy) (§200.430 and §200.431). Although the County has processes in place to cover these areas, there are no formal written policies covering payments, allowability of costs, and compensation. As a result of this condition, the County did not fully comply with the Uniform Guidance applicable to the above noted grants. Auditor Recommendation: We are aware that the County is evaluating options using internal and external resources to take corrective action. We recommend that the County proceed with its selected option as soon as practical, but no later than the end of the next fiscal year. Corrective Action: The County will proceed with its selected option no later than the end of the next fiscal year. Responsible Person: Susan Maier, Director of Fiscal Services Anticipated Completion Date: December 31, 2026

View Audit 405078

Finding 1219127 (2025-003)

Material Weakness 2025

Schoolcraft Memorial Hospital

MI

Special Tests & Provisions Questioned Costs Significant Deficiency § 200.303

Special Tests and Provisions Significant Deficiency in Internal Control over Compliance and Instance of Noncompliance Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants Finding Summary: The Hospital did not maintain the required debt service ...

Special Tests and Provisions Significant Deficiency in Internal Control over Compliance and Instance of Noncompliance Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants Finding Summary: The Hospital did not maintain the required debt service coverage ratio for the year ended December 31, 2025. Additionally, the Hospital does not have a control process in place to ensure that the monitored debt service coverage ratio is accurate and non-compliance is reported timely. Responsible Individuals: Eric J. Price, CFO Corrective Action Plan: Management has enhanced internal control policies and processes to monitor compliance with debt covenants, including the periodic calculation of debt service coverage ratio, documentation of management review and approval, and timely communication with the lender if noncompliance is identified. Anticipated Completion Date: September 30, 2026

View Audit 405071

Finding 1219012 (2025-007)

Material Weakness 2025

State of Alabama

AL

Matching / Level of Effort / Earmarking Allowable Costs / Cost Principles § 200.303

There is no direct guidance detailing steps to update the FMAP rate in STAARS. Changes are made in the STAARS cost allocation test environment and then implemented in the production environment via STAARS Support. Cost allocation runs quarterly. While we initiate the entering of statistics from work...

There is no direct guidance detailing steps to update the FMAP rate in STAARS. Changes are made in the STAARS cost allocation test environment and then implemented in the production environment via STAARS Support. Cost allocation runs quarterly. While we initiate the entering of statistics from work sampling and other sources, we are at the mercy of STAARS Support to actually run cost allocation for DHR.

View Audit 405017

Finding 1219011 (2025-006)

Material Weakness 2025

State of Alabama

AL

Allowable Costs / Cost Principles Matching / Level of Effort / Earmarking § 200.303

DHR has added additional steps related to Adult Day Care services entered in FACTS. This will ensure entered services reconcile to the approved invoice prior to approval in FACTS.

View Audit 405017

Finding 1218776 (2025-002)

Material Weakness 2025

City of Lowell

MA

Procurement, Suspension & Debarment Subrecipient Monitoring Allowable Costs / Cost Principles § 200.327

Audit Finding Reference: 2025-002 Improve Procurement Procedures Planned Corrective Action: The District will strengthen its procurement procedures for federally funded purchases to ensure compliance with Uniform Guidance requirements. Specifically, the District will: 1. Revise procurement procedure...

Audit Finding Reference: 2025-002 Improve Procurement Procedures Planned Corrective Action: The District will strengthen its procurement procedures for federally funded purchases to ensure compliance with Uniform Guidance requirements. Specifically, the District will: 1. Revise procurement procedures to clearly identify when federal procurement requirements apply in addition to state and local procurement regulations. 2. Develop and implement a federal procurement checklist that must be completed prior to the award of any contract funded in whole or in part with federal grant funds. 3. Work with the Law Department to establish standardized contract templates containing all required federal contract provisions, including the Byrd Anti-Lobbying Amendment when applicable. 4. Require a secondary review bythe Business Office or Grants Management personnel before contract execution to verify compliance with Uniform Guidance procurement standards and required contract clauses. 5. Provide annual training to Business Office staff, grant managers, and other personnel involved in procurement activities regarding federal procurement requirements and contract provisions. 6. Conduct periodic internal reviews of federally funded procurement transactions to ensure ongoing compliance. Planned Implementation Date of Corrective Action: The revised procedures, procurement checklist, and standardized contract templates will be implemented by7 /1/2026. Training will be completed for applicable staff during the current fiscal year and prior to the initiation of future federally funded procurements. Person Responsible for Corrective Action: Assistant Superintendent of Finance Derek Pinto, Assistant Superintendent of Finance

View Audit 404883

Finding 1218744 (2025-001)

Material Weakness 2025

Town of Southbridge, Massachusetts

MA

Allowable Costs / Cost Principles Questioned Costs Material Weakness § 200.430

Finding 2025-001 Condition: Time and effort certifications were not maintained for grant employees. Corrective Action Planned: Southbridge Public Schools will be creating and implementing procedures for time and effort certifications. The procedure will include use of the form distributed by the Mas...

Finding 2025-001 Condition: Time and effort certifications were not maintained for grant employees. Corrective Action Planned: Southbridge Public Schools will be creating and implementing procedures for time and effort certifications. The procedure will include use of the form distributed by the Massachusetts Department of Elementary and Secondary Education for employees who are paid by a grant and require a time and effort certification. Anticipated Completion Date: July 31, 2026 Contact: Matthew Robidoux – Business Manager

View Audit 404856

Finding 1218705 (2025-014)

Material Weakness 2025

State of Michigan

MI

Eligibility Questioned Costs Cash Management § 200.516

Finding 2025-014 Medicaid Cluster, ALN 93.775, 93.777, and 93.778 and Children's Health Insurance Program, ALN 93.767 - Expenditure Processing for Medical Payments Management Views MDHHS agrees with the finding. Planned Corrective Action MDHHS implemented a system update in Bridges to ensure new cas...

Finding 2025-014 Medicaid Cluster, ALN 93.775, 93.777, and 93.778 and Children's Health Insurance Program, ALN 93.767 - Expenditure Processing for Medical Payments Management Views MDHHS agrees with the finding. Planned Corrective Action MDHHS implemented a system update in Bridges to ensure new cases are correctly assigned to either CHIP or Medicaid, and all remaining existing cases were updated during fiscal year 2025, eliminating the need for the quarterly manual reclassification. MDHHS discontinued the manual reclassification process during fiscal year 2026 and transferred the expenditures back to Medicaid for the individuals identified in the finding. Anticipated Completion Date Completed Responsible Individual(s) Brant Cole, MDHHS Crystal Kline, MDHHS

View Audit 404775

Finding 1218704 (2025-013)

Material Weakness 2025

State of Michigan

MI

Eligibility Questioned Costs Subrecipient Monitoring § 200.516

Finding 2025-013 Medicaid Cluster, ALN 93.775, 93.777 and 93.778 and Children’s Health Insurance Program, ALN 93.767 - Beneficiary Eligibility Management Views MDHHS agrees with the identified exceptions for parts a. and c. However, MDHHS disagrees that 2 Medicaid cases and 11 CHIP cases with MAGI d...

Finding 2025-013 Medicaid Cluster, ALN 93.775, 93.777 and 93.778 and Children’s Health Insurance Program, ALN 93.767 - Beneficiary Eligibility Management Views MDHHS agrees with the identified exceptions for parts a. and c. However, MDHHS disagrees that 2 Medicaid cases and 11 CHIP cases with MAGI determinations cited in part b. lacked documentation supporting the eligibility determination. CMS has determined that a reasonable compatibility indicator can be used for CMS audit purposes to determine if the attested income information was electronically verified for MAGI cases. For this reason, MDHHS disagrees that documentation was not maintained. The State of Michigan (SOM) MiIntegrate system communicates with various electronic State and federal trusted data sources and sends information from these sources, along with the beneficiaries’ attested income, to the SOM MAGI Rules Engine where the MAGI eligibility determination is made. As part of the MAGI eligibility determination, a reasonable compatibility test is completed to determine if beneficiary/applicant attested income is within a specified percentage of the trusted data sources or if the attested and verified income are below the threshold for the applicable program. The results of the MAGI eligibility determination are sent back to MiIntegrate using an Account Transfer (AT) packet that contains the results. MiIntegrate then communicates the results to the SOM MAGI Viewer and Bridges using an AT packet and Bridges stores the AT packet number only that can be used to view the details of the AT packet within the SOM MAGI Viewer. The version of the AT packet within the MAGI Viewer also contains a reasonable compatibility indicator that documents the outcome of the reasonable compatibility test and supports the SOM MAGI Rules Engine eligibility decision. MDHHS stores the AT packet information, including facts essential to the eligibility determination, within MiIntegrate and the MAGI viewer instead of Bridges to help protect and secure the federal income tax data and unemployment data used for the determination. The AT packet for each individual determination can be retrieved from the MAGI Viewer using the AT packet number stored in each beneficiary’s case file within Bridges. MDHHS is not aware of any federal regulations that preclude MDHHS from storing this information in a separate, secure system to ensure appropriate data protection and access controls required by federal and State laws. Planned Corrective Action To address the exceptions identified that are not related to MAGI-based income verification results, MDHHS developed mandatory training protocols for eligibility specialists, and the first Medicaid audit-focused mandatory training was implemented in June 2025. MDHHS will continue to determine where additional training or enhancements to training are needed to ensure eligibility is accurately determined and documentation is properly maintained within the electronic case file. For the exception that did not contain the appropriate coverage termination date, MDHHS reviewed the case and determined that the beneficiary remained eligible to transition to another aid category, and therefore no improper payments occurred. MDHHS will identify the system issue that produced the incorrect termination date and will implement a system fix if necessary. Should such an improvement be identified, it will be submitted through the Departmental Work Intake Process for prioritization and implementation by the Bridges technical team. MDHHS maintains that documentation supporting MAGI eligibility determinations is retained within MiIntegrate and the MAGI Viewer and therefore disagrees that case file documentation was not maintained. As such, no further corrective action is planned. Anticipated Completion Date June 30, 2027 Responsible Individual(s) Logan Dreasky, MDHHS Brant Cole, MDHHS Mariah Schaefer, MDHHS

View Audit 404775

Finding 1218680 (2025-054)

Material Weakness 2025

State of Michigan

MI

Matching / Level of Effort / Earmarking Allowable Costs / Cost Principles Eligibility

Finding 2025-054 Adoption Assistance, ALN 93.659 - Lack of Fingerprint Background Checks Management Views MDHHS disagrees that completion of fingerprint-based background checks within 12 months of adoption finalization are a condition of eligibility for adoption assistance payments. Federal law 42 U...

Finding 2025-054 Adoption Assistance, ALN 93.659 - Lack of Fingerprint Background Checks Management Views MDHHS disagrees that completion of fingerprint-based background checks within 12 months of adoption finalization are a condition of eligibility for adoption assistance payments. Federal law 42 USC 671(a)(20) requires states to complete a fingerprint-based criminal background check before a prospective adoptive parent may be finally approved for placement; however, federal statute does not mandate additional or subsequent fingerprint-based criminal history rechecks after placement approval as a condition of eligibility for adoption assistance payments. Michigan’s Title IV-E State Plan incorporates the safety requirements mandated by federal law 42 USC 671(a)(20) and cites MDHHS policy ADM 0520 (Background Checks, Clearances, Criminal History Checks, and Fingerprinting). ADM 0520 governs all background checks, clearances, criminal history checks, and fingerprinting requirements that MDHHS must complete for foster care and adoptive home providers. The policy establishes the department’s comprehensive safety check framework and is not limited to adoption assistance eligibility determinations. Rather, ADM 0520 outlines the procedures MDHHS uses to meet federal and State safety requirements for approving and supervising foster and adoptive placements, including checks conducted both before placement approval and those completed afterward to ensure the ongoing safety and well being of children under MDHHS supervision. For all cases sampled, fingerprint based clearances were completed within 12 months of the family’s approval for placement, and documentation of these clearances is included in the adoption assistance file. Therefore, MDHHS is compliant with all applicable federal and State requirements for adoption assistance payments. Planned Corrective Action MDHHS will clarify policy to explicitly distinguish safety-driven clearances from federally required placement-approval checks, including clarification that the required prerequisite for adoptive placement and adoption assistance payments is completion of fingerprint-based clearances within 12 months of approval. Anticipated Completion Date December 1, 2026 Responsible Individual(s) Heather Williams, MDHHS Kim Borja, MDHHS Kathonya Triplett, MDHHS

View Audit 404775

Finding 1218679 (2025-053)

Material Weakness 2025

State of Michigan

MI

Matching / Level of Effort / Earmarking

Finding 2025-053 Adoption Assistance, ALN 93.659 - Annual Adoption Savings Calculation and Accounting Report Management Views MDHHS agrees with the finding. Planned Corrective Action MDHHS has reviewed the query used to determine the information reported within the Annual Adoption Savings Calculatio...

Finding 2025-053 Adoption Assistance, ALN 93.659 - Annual Adoption Savings Calculation and Accounting Report Management Views MDHHS agrees with the finding. Planned Corrective Action MDHHS has reviewed the query used to determine the information reported within the Annual Adoption Savings Calculation and Accounting report and has identified the changes necessary to improve the accuracy of the savings reported to HHS. To ensure accurate reporting moving forward, MDHHS will develop a new query by January 1, 2027, that incorporates the foster care initial funding determination and includes built in validation controls. This new query will also ensure the applicable or non-applicable status is assigned accurately and is not determined more than once. MDHHS will also conduct a comprehensive review of all previously reported cases to verify the accuracy of each case’s applicable or non applicable status. Following review completion, MDHHS will submit a revised report to HHS to correct any inaccuracies identified in the previously reported adoption savings. MDHHS anticipates completing the review by January 1, 2027, and submitting the revised report to HHS by February 28, 2027. Anticipated Completion Date February 28, 2027 Responsible Individual(s) Heather Williams, MDHHS Kim Borja, MDHHS Kathonya Triplett, MDHHS Rebecca Jones, MDHHS Tiffany Clarke, MDHHS Teresa Laurin, MDHHS

View Audit 404775

Corrective Action Plans

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