Corrective Action Plans

Finding 485406 (2024-002)

None 2024

IL

Student Financial Aid Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

2024-002 Student Financial Aid – 84.268 – Federal Direct Loan Program, 84.063 – Federal Pell Grant Program, 84.007 – Federal Supplemental Educational Opportunity Grant Program, 84.033 – Federal Work-Study Program Recommendation: We recommend the review process for awarding be documented and retain...

2024-002 Student Financial Aid – 84.268 – Federal Direct Loan Program, 84.063 – Federal Pell Grant Program, 84.007 – Federal Supplemental Educational Opportunity Grant Program, 84.033 – Federal Work-Study Program Recommendation: We recommend the review process for awarding be documented and retained as support for the review and approval process. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The Director of Financial Aid will document each change to an award by printing a new award offer and saving to document tracking. As this is the final year in which Lincoln Christian University will have academic operations, we believe this corrective action to be sufficient for the remainder of the year. Name of the contact person responsible for corrective action: Margie Martin, Director of Accounting Planned completion date for corrective action plan: May 31, 2024.

View Audit 318153

Finding 485172 (2024-002)

Significant Deficiency 2024

Regis University

CO

Student Financial Aid Questioned Costs Special Tests & Provisions

Finding 2024-002 Personnel Responsible for Corrective Action: Cathy Gorrell, Registrar Anticipated Completion Date: September 30, 2024 Corrective Action Plan: The Office of the Registrar recognizes the systematic programming of a pseudo academic program after a pseudo course has been added with a ...

Finding 2024-002 Personnel Responsible for Corrective Action: Cathy Gorrell, Registrar Anticipated Completion Date: September 30, 2024 Corrective Action Plan: The Office of the Registrar recognizes the systematic programming of a pseudo academic program after a pseudo course has been added with a future date after the student’s current program has been inactivated or graduated. This process has been at the request of the Office of Student Accounts for the graduation fee. The Office of the Registrar will work with the Office of Student Accounts to move to the system Graduation Application process rather than the customized and manual process of pseudo courses. Further, the Office of the Registrar has increased its data quality checks on the pseudo programs and courses. In conjunction, this should eliminate the reporting of active programs when the student has graduated.

View Audit 317977

Finding 479384 (2024-001)

None 2024

Casa Barranquitas, Inc. Hud Project No. 056-Eh-346-Wah-L8

PR

Questioned Costs Cash Management HUD Housing Programs § 200.305

We agree. The reimbursement has been processed in the Voucher for the month of August 2024. Procedures have been established improving the reviewing and monitoring process in order to detect and help to identify errors before vouchers processed.

View Audit 315891 Questioned Costs: $1

Finding 477896 (2024-001)

Significant Deficiency 2024

Clinica Campesina Family Health Services

CO

Questioned Costs Significant Deficiency Matching / Level of Effort / Earmarking

Federal Program: Consolidated Health Centers Grant Assistance Listing No. 93.224 & 93.527 Recommendation: Our auditors recommended the Organization to review internal controls in regards to retaining the completed sliding fee applications in the patients record to support the sliding fee discount p...

Federal Program: Consolidated Health Centers Grant Assistance Listing No. 93.224 & 93.527 Recommendation: Our auditors recommended the Organization to review internal controls in regards to retaining the completed sliding fee applications in the patients record to support the sliding fee discount provided to the patient. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The Organization is aware of the importance of properly applying the sliding fee scale to all eligible patients. We feel that we have strong policies and procedures to ensure this is performed accurately. However, the process is dependent on many individuals and is susceptible to human error. We will implement the following process to mitigate this risk. We will increase our internal audit procedures to audit sliding fee applications on a more frequent basis for any Enrollment Specialist who fails to maintain a 5% error rate. We will increase the number of Sliding Fee Discount applications to 5 every month. We will also conduct a retraining with the team to ensure all documents are uploaded into the document management system correctly for each patient. If the U.S. Department of Health and Human Services has questions regarding this plan, please call Brian Johnston, CFO at 303-665-3036.

View Audit 314530

Finding 1229946 (2023-002)

Material Weakness 2023

Northwoods Stewardship Center

VT

Matching / Level of Effort / Earmarking Significant Deficiency § 200.306

View of responsible officials and planned corrective action: Northwoods management will train all employees included in USFW activities to use a USFWS code on our current time sheet tracking. This will be implemented in September 2025, and will be reviewed monthly by management, through current time...

View of responsible officials and planned corrective action: Northwoods management will train all employees included in USFW activities to use a USFWS code on our current time sheet tracking. This will be implemented in September 2025, and will be reviewed monthly by management, through current time sheet review procedures. We will review time tracking methods with USFWS grant partners to ensure all tracking requirements for the program, and per agreement, are met. Quarterly, program director match contribution will be reconciled from time sheet reports with the general ledger for USFW agreements by the Business Manager. Northwoods management will obtain a review of matching contributions documentation procedures from a qualified non-profit accountant.

View Audit 411190

Finding 1229908 (2023-003)

Material Weakness 2023

RAP INC

DC

Reporting Matching / Level of Effort / Earmarking § 200.339 § 200.501 § 200.510 § 200.516

U.S. Department of Housing and Urban Development 2023-003 Material Weakness in Internal Control over Compliance 14.218 – Community Development Block Grant District of Columbia, Department of Housing and Community Development Contract Number: 2019-009 and 2010-38 Condition: The $200,000 predevelopmen...

U.S. Department of Housing and Urban Development 2023-003 Material Weakness in Internal Control over Compliance 14.218 – Community Development Block Grant District of Columbia, Department of Housing and Community Development Contract Number: 2019-009 and 2010-38 Condition: The $200,000 predevelopment and $3,800,000 construction loans from the District of Columbia Department of Housing and Community Development were financed with federal funding. Management and the prior auditors were not previously aware of the federal funding source, and the loan had not been evaluated for applicable federal compliance requirements under OMB Circular A-133 or the Uniform Guidance since the inception of the agreement. Recommendation: We recommend that management implement a formal process to review all loan, grant, and financing agreements to determine whether funding is derived from federal sources and whether the arrangement is subject to federal compliance or single audit requirements. This review should be performed at inception of each agreement and updated at least annually, with documentation maintained in the Organization’s debt and contract repository and reviewed by personnel responsible for compliance and financial reporting. Explanation of Disagreement with Audit Finding There is no disagreement with the audit finding. Action taken in response to finding: In addition to the steps mentioned in the related finding above (2023-002), management has also engaged CliftonLarsonAllen LLP to catch up with any official disclosures related to this issue including single audit compliance and any related or resulting compliance disclosures remaining to be completed. Name of the contact person responsible for corrective action: Dr. Deja Gilbert, PhD, MBA, FACHE, LPC, LMHC, President and CEO - dgilbert@gaudenzia.org Planned completion date for corrective action plan: December 31, 2026

View Audit 411134

Finding 1229674 (2023-012)

Material Weakness 2023

Municipality of Anchorage, Alaska

AK

Material Weakness Reporting Matching / Level of Effort / Earmarking § 200.303 § 200.512

Reporting - Deadline for Federal Single Audit - Noncompliance and Material Weakness in Internal Control Over Compliance Corrective Action Plan: The Municipality has begun strengthening year-end financial reporting and audit planning through formal close schedules, defined responsibilities, milestone...

Reporting - Deadline for Federal Single Audit - Noncompliance and Material Weakness in Internal Control Over Compliance Corrective Action Plan: The Municipality has begun strengthening year-end financial reporting and audit planning through formal close schedules, defined responsibilities, milestone tracking, enhanced interdepartmental coordination, and increased management oversight to support the timely completion of future Federal Single Audits. Management will evaluate the effectiveness of these improvements through completion of a full audit cycle. Anticipated Completion Date June 30, 2027

View Audit 410871

Finding 1229593 (2023-009)

Material Weakness 2023

Municipality of Anchorage, Alaska

AK

Material Weakness Reporting Matching / Level of Effort / Earmarking § 200.303

Reporting – Material Noncompliance and Material Weakness in Internal Control Over Compliance Corrective Action Plan: The Municipality has begun implementing an enterprise-wide corrective action strategy to strengthen grant administration and reporting processes. Corrective actions include developing...

Reporting – Material Noncompliance and Material Weakness in Internal Control Over Compliance Corrective Action Plan: The Municipality has begun implementing an enterprise-wide corrective action strategy to strengthen grant administration and reporting processes. Corrective actions include developing standardized policies and procedures, formalizing documentation and supervisory review requirements, improving subrecipient monitoring, strengthening cross-departmental coordination, and incorporating these processes into formal year-end close and audit planning activities. Management will evaluate the effectiveness of these controls through completion of a full audit cycle. Anticipated Completion Date March 31, 2027

View Audit 410871

Finding 1228734 (2023-004)

Material Weakness 2023

Activate Work Inc.

CO

Allowable Costs / Cost Principles Subrecipient Monitoring Matching / Level of Effort / Earmarking § 200.303 § 200.307 § 200.403

Action Taken in Response to Finding: Financial practices addressing program income were in place; however, processes were formalized to ensure full compliance with 2 CFR §200.307. ActivateWork developed and implemented a Program Income Policy as part of its Financial Policies and Procedures, adopted...

Action Taken in Response to Finding: Financial practices addressing program income were in place; however, processes were formalized to ensure full compliance with 2 CFR §200.307. ActivateWork developed and implemented a Program Income Policy as part of its Financial Policies and Procedures, adopted May 2026. As of March 2026, a standardized program income tracking and reconciliation is performed monthly as part of the month-end (EOM) close. This process includes: • Identification and tracking of program income by funding source • Application of program income to actual allowable expenses • Mapping of Federal reimbursement requests to underlying expenses to ensure program income is applied prior to reimbursement • Validation that no duplication of funding occurs between program income and Federal reimbursements These enhancements establish a structured and auditable framework for program income tracking, application, and compliance. Control Enhancement: Program income is tracked and recorded within a standardized Excel-based tool (Program Income vs. Unreimbursed Cost Analysis) and applied in accordance with federal requirements. A standardized program income tracker: • Applies program income to actual expenses • Links expenses to reimbursement requests • Ensures program income is fully utilized prior to requesting Federal reimbursement, unless otherwise specified by award terms • Prevents duplication of income and reimbursement Monitoring & Review: • Program income tracking is reviewed monthly as part of the EOM close process • Review is performed by the Senior Accountant • A secondary review is performed by the Director of Finance & Operations to validate completeness and compliance • Any discrepancies are identified and resolved prior to reimbursement submission Testing & Validation: • Beginning in June 2026, quarterly internal reviews will be conducted to validate program income tracking and application • Testing will confirm that: o Program income is accurately recorded o Program income is applied prior to reimbursement o No duplication of funding exists • Results will be documented and tracked for remediation Documentation & Evidence: • Program income tracker maintained in Teams / SharePoint • Supporting documentation tied to underlying expenses Control Owner(s): • Director of Finance & Operations • Finance Team Responsible Party: Helen Young Hayes, Founder / Chief Executive Officer, in coordination with the Director of Finance & Operations and Finance Staff Anticipated Completion Date: All corrective actions will be implemented by June 30, 2026. Ongoing monthly monitoring, reconciliation, and quarterly validation will continue. Status: • Program Income Policy: Implemented May 2026 • Program income tracking process: Implemented April 2026 • Monthly reconciliation and application (EOM Close): Implemented May 2026 • Quarterly internal reviews will be conducted to validate program income tracking and application: June 2026.

View Audit 410398

Finding 1228725 (2023-002)

Material Weakness 2023

Activate Work Inc.

CO

Matching / Level of Effort / Earmarking § 200.306 § 200.403 § 200.405

Action Taken in Response to Finding: In 2023, invoices were submitted using a format aligned with initial guidance from the Colorado Department of Human Services (CDHS), reflecting a per-learner, activity-based approach. Beginning in October 2024, updated guidance required invoices to be based on ac...

Action Taken in Response to Finding: In 2023, invoices were submitted using a format aligned with initial guidance from the Colorado Department of Human Services (CDHS), reflecting a per-learner, activity-based approach. Beginning in October 2024, updated guidance required invoices to be based on actual costs incurred, including the use of supporting documentation such as timesheets and receipts to substantiate costs. As of October 2025, CDHS updated reimbursement requirements to no longer require supporting documentation at the time of invoice submission. However, complete supporting documentation is maintained and provided upon request for monitoring or audit purposes. Standardized Excel-based tools provided by CDHS are utilized for reimbursement submission (Invoice and Ledger). Transaction-level cost tracking was implemented to ensure allowable and eligible costs are recorded and supported. Financial and grant-related policies were previously maintained and were subsequently standardized and incorporated into Financial Policies and Procedures in 2023, with a comprehensive Grant Management framework implemented in May 2026. Control Enhancement: Beginning in 2025, all costs applied toward matching requirements are recorded and tracked at the transaction level within the accounting system and are fully supported by source documentation. Matching contributions must: • Be based on actual, allowable, and allocable costs • Be verifiable from accounting records • Not include estimated or budgeted amounts A standardized approach has been implemented to ensure that matching costs are derived from the same underlying financial data used for reimbursable costs. Monitoring & Review: • Matching costs are reviewed by the Senior Accountant prior to inclusion in reimbursement requests • A secondary monthly review is performed by the Director of Finance & Operations to validate accuracy, allowability, and compliance with matching requirements • Any discrepancies between recorded costs and matching allocations are identified and resolved prior to submission Testing & Validation: • Beginning June 2026, quarterly internal reviews will be conducted to test a sample of matching costs for compliance with documentation and allowability requirements • Testing will confirm that matching costs are fully supported and traceable to accounting records • Results will be documented and tracked, and any identified deficiencies will require corrective action Documentation & Evidence: • Supporting documentation for matching costs is maintained in Microsoft Teams • Matching calculations and supporting detail are retained and available for audit or monitoring • Review and approval are evidenced via email approval and retained as part of the audit record Control Owner(s): • Director of Finance & Operations • Finance Team Responsible Party: Helen Young Hayes, Founder / Chief Executive Officer, in coordination with the Director of Finance & Operations and Finance Staff Anticipated Completion Date: All corrective actions will be implemented by June 30, 2026. Ongoing monitoring, quarterly testing, and policy updates will continue. Status: • Transaction-level tracking of matching costs: Implemented 2025 • Updated invoicing methodology: Implemented October 2024; revised October 2025 • Cost Sharing policy: Implemented May 2026 • Grant Management framework; Incorporated in Financial Policy and Procedures on May 2026. • Quarterly internal reviews will be conducted to test a sample of matching costs for compliance with documentation and allowability requirements: June 2026

View Audit 410398

Finding 1228719 (2023-001)

Material Weakness 2023

Activate Work Inc.

CO

Allowable Costs / Cost Principles Matching / Level of Effort / Earmarking Material Weakness § 200.302 § 200.403

Action Taken in Response to Finding: In 2023, invoices were submitted using a format aligned with initial guidance from the Colorado Department of Human Services (CDHS), reflecting a per-learner, activity-based approach. Beginning in October 2024, updated guidance required invoices to be based on ac...

Action Taken in Response to Finding: In 2023, invoices were submitted using a format aligned with initial guidance from the Colorado Department of Human Services (CDHS), reflecting a per-learner, activity-based approach. Beginning in October 2024, updated guidance required invoices to be based on actual costs incurred, supported by documentation such as timesheets and receipts. As of October 2025, CDHS no longer required supporting documentation at the time of submission; however, supporting documentation continues to be maintained and is provided upon request for monitoring or audit purposes. Standardized Excel-based tools provided by CDHS are utilized for reimbursement submission (Invoice and Ledger). Transaction-level cost tracking was implemented to ensure allowable and eligible costs are recorded and supported. Financial and grant-related policies were standardized and incorporated into Financial Policies and Procedures in May 2024, with a comprehensive grant management framework implemented in May 2026. Control Enhancement: Beginning in 2025, all grant-related expenditures are recorded and tracked at the transaction level within the accounting system. Each transaction must include appropriate supporting documentation and be coded to the correct funding source. A standardized payroll-to-invoice reconciliation process has been implemented to ensure that all costs charged to federal awards are allowable, allocable, and properly supported. Monitoring & Review: • Costs are reviewed by the Senior Accountant prior to inclusion in reimbursement requests • A secondary monthly review is performed by the Director of Finance & Operations to validate allowability, completeness, and alignment with funding requirements • Exceptions are documented and resolved prior to submission Testing & Validation: • Beginning in June 2026, quarterly internal reviews will be conducted to test a sample of transactions for compliance with documentation and allowability requirements • Results will be documented and tracked, and any identified deficiencies will require corrective action Documentation & Evidence: • Supporting documentation is maintained in Microsoft Teams / SharePoint • Review and approval are evidenced via email approval and retained as part of the audit record Control Owner(s): • Director of Finance & Operations • Finance Team Responsible Party: Helen Young Hayes, Founder / Chief Executive Officer, in coordination with the Finance Staff Anticipated Completion Date: All corrective actions will be implemented as of June 30, 2026. Ongoing monitoring, quarterly testing, and policy updates will continue.

View Audit 410398

Finding 1228548 (2023-006)

Material Weakness 2023

Mental Health Kokua

HI

Cash Management Subrecipient Monitoring Period of Performance § 200.303 § 200.334

Management agrees with the finding and will implement procedures to ensure reimbursement request documentation and supporting schedules are retained in a centralized location and readily accessible for future monitoring and audit purposes. Anticipated Completion Date: September 30, 2026.

View Audit 410168

Finding 1227860 (2023-007)

Material Weakness 2023

Island Health, Inc.

MA

Procurement, Suspension & Debarment Subrecipient Monitoring Allowable Costs / Cost Principles § 200.308 § 200.309 § 200.403

Item 2023.007 – Period of Performance Recommendation The Center should develop written procedures to review all expenditures to ensure they are within the proper period of performance of the grant. Repeat Finding Yes Action Taken Island Health Care will take the following actions to address this rec...

Item 2023.007 – Period of Performance Recommendation The Center should develop written procedures to review all expenditures to ensure they are within the proper period of performance of the grant. Repeat Finding Yes Action Taken Island Health Care will take the following actions to address this recommendation: • Conduct a pre-approval of expenditures, verifying that the expense is allowable under the grant terms and falls within the period of performance • Utilize a pre-approval form that includes details of the proposed expenditure, its necessity, and confirmation in the form of authorized signatures that it is within the grant period. • Require all relevant supporting documentation with the date the expense was incurred, ensuring it falls within the grant's period of performance. This is further reviewed by the CFO who will verify that the expenditure meets all requirements and is then able to record it in the accounting system. • Conduct regular reviews of expenditures to ensure compliance with the grant period and maintain audit trail • Review these procedures annually to ensure they ongoing compliance with the grant's period of performance

View Audit 409789

Finding 1227840 (2023-020)

Material Weakness 2023

Commonwealth of the Northern Mariana Islands Public School System

MP

Special Tests & Provisions Subrecipient Monitoring Matching / Level of Effort / Earmarking § 200.303

Finding No.: 2023-020 AL Program: 93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance Area: Special Tests and Provisions - Key Level Management Questioned Costs: Undeterminable Views of Auditee and Corrective Action Plan: Management’s Position: PSS Manage...

Finding No.: 2023-020 AL Program: 93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance Area: Special Tests and Provisions - Key Level Management Questioned Costs: Undeterminable Views of Auditee and Corrective Action Plan: Management’s Position: PSS Management concurs with the findings. Financial and Grants Management processes were promulgated in a SOP on September 18, 2024. The SOPs are under review by an external consultant and recommendations made to improve documentation of time and effort allocable under federal awards. (See also 2023-004, 2023-0009) Corrective Action Plan: I. Establishment of Time and Effort SOPs: PSS will finalize and implement a dedicated Time and Effort Reporting SOP. This policy will explicitly define the key management Level of Effort (LOE) requirements by position and mandate the collection of specific supporting records, including Notice of Personnel Action (NOPA) forms, payroll registers, and certified timesheets. The SOP will feature robust internal controls and supervisory review procedures designed to prevent improper payments and ensure accurate labor distribution. II. Standardization of Key Management Records: PSS will obtain and systematically retain NOPA forms or equivalent documentation for all six positions identified in the grant agreement. This documentation will serve as the primary evidence to demonstrate compliance. III. Labor Distribution Monitoring Controls: PSS is implementing ongoing monitoring controls to ensure continued compliance. This includes a periodic internal review of payroll registers against the original grant agreements to verify that the labor costs charged to the award remain consistent with the approved personnel budget and documented effort. Proposed Completion Date: August 2026 Name of Contact Person and Title: Contact: Jacqueline Che, Federal Programs Officer Email Address: jacqueline.che@cnmipss.org

View Audit 409786

Finding 1227838 (2023-018)

Material Weakness 2023

Commonwealth of the Northern Mariana Islands Public School System

MP

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

Finding No.: 2023-018 AL Program: 93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance Area: Allowable Costs/Cost Principles Questioned Costs: $-0- Views of Auditee and Corrective Action Plan: Management’s Position: PSS Management concurs with the finding....

Finding No.: 2023-018 AL Program: 93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance Area: Allowable Costs/Cost Principles Questioned Costs: $-0- Views of Auditee and Corrective Action Plan: Management’s Position: PSS Management concurs with the finding. While internal verification of disbursements is a standard part of our fiscal workflow, we recognize that our current process has the space to improve. Corrective Action Plan: To ensure that all disbursements are verified and documented prior to payment, PSS will implement the following: I. High Level Review and Approval: Implementation of Comptroller/ Director of Finance review on the Batch Invoice Summary signifying invoice entries on the said batch are verified and correct. After the review, the Comptroller will sign. II. Updated Payment Verification Process: Payments via check or ACH are reviewed by the Comptroller/ Director of Finance through Payment Manager and marking the Batch Invoice Summary that payments matched the invoice. Proposed Completion Date: December 2025 Name of Contact Person and Title: Contact: Jonathan Aguon, Director of Finance Email Address: jonathan.aguon@cnmipss.org

View Audit 409786

Finding 1227837 (2023-017)

Material Weakness 2023

Commonwealth of the Northern Mariana Islands Public School System

MP

Special Tests & Provisions Subrecipient Monitoring Allowable Costs / Cost Principles § 200.303

Finding No.: 2023-017 AL Program: COVID-19 84.425A/84.425X Education Stabilization Fund Area: Special Tests and Provisions - Private School Participation Questioned Costs: Undeterminable Views of Auditee and Corrective Action Plan: Management’s Position: PSS Management disagrees with the finding. PS...

Finding No.: 2023-017 AL Program: COVID-19 84.425A/84.425X Education Stabilization Fund Area: Special Tests and Provisions - Private School Participation Questioned Costs: Undeterminable Views of Auditee and Corrective Action Plan: Management’s Position: PSS Management disagrees with the finding. PSS asserts that timely and meaningful consultations were conducted with private school officials prior to making decisions regarding the size, scope, and funding of equitable services for FY2023. Calculations for the equitable share under the Education Stabilization Funds were performed in accordance with federal regulations, ensuring that per-pupil allocations for eligible private school students and teachers were equitable relative to public school expenditures. PSS maintains that consultation timelines, meeting records, and allocation formulas were maintained. While PSS is continuously refining its administrative workflows, the existing documentation and controls were sufficient to satisfy the requirements of 34 CFR § 299.7. Proposed Completion Date: Resolution in progress and on track for completion by August 2026. Name of Contact Person and Title: Contact: Jacqueline Che, Federal Programs Officer Email Address: jacqueline.che@cnmipss.org

View Audit 409786

Finding 1227835 (2023-016)

Material Weakness 2023

Commonwealth of the Northern Mariana Islands Public School System

MP

Special Tests & Provisions Procurement, Suspension & Debarment Matching / Level of Effort / Earmarking § 200.303

Finding No.: 2023-016 AL Program: COVID-19 84.425A/84.425X Education Stabilization Fund Area: Special Tests and Provisions - Wage Rate Requirement Questioned Costs: Undeterminable Views of Auditee and Corrective Action Plan: Management’s Position: PSS Management concurs with the audit findings. We a...

Finding No.: 2023-016 AL Program: COVID-19 84.425A/84.425X Education Stabilization Fund Area: Special Tests and Provisions - Wage Rate Requirement Questioned Costs: Undeterminable Views of Auditee and Corrective Action Plan: Management’s Position: PSS Management concurs with the audit findings. We acknowledge that our current procurement and contract administration processes did not consistently incorporate the mandatory Davis-Bacon Act labor standard clauses or the subsequent collection of certified payrolls. PSS is committed to implementing a rigorous compliance framework for all federally funded construction and repair projects. Financial, Procurement, and Grants Management policies procedures were promulgated in a SOPs on September 18, 2024. The financial management system was subsequently changed to Tyler Munis to conform with CNMI central government requirements which will enhance capabilities. The SOPs and the Tyler Munis implementation are under review by an external consultant and recommendations made to improve documentation of cost allowability have been received. Payment procedures are being addressed in a separate SOP. Corrective Action Plan: To ensure full compliance with 29 CFR 5.5 and federal wage rate requirements, PSS will implement the following: I. Standardized Construction Contract Template: PSS Legal Counsel and the Procurement Office will develop a standardized "Federal Construction Contract Addendum." This addendum will contain all mandatory Davis-Bacon Act clauses required by 29 CFR 5.5(a)(1)-(10). Effective immediately, no contract or purchase order exceeding $2,000 for construction, alteration, or repair will be executed without the inclusion of this addendum. II. Mandatory Certified Payroll Submission Protocol: PSS will update its "Notice to Proceed" and project management guidelines to explicitly state that progress payments will be withheld until the contractor submits the required weekly certified payrolls. Contractors will be provided with the Form WH-347 (or an equivalent) to ensure they are using the correct reporting format. III. Pre-Construction Compliance Meetings: For all future Davis-Bacon covered projects, PSS will hold a mandatory pre-construction meeting with contractors to clearly communicate their obligations regarding certified payrolls and the posting of the applicable wage decision at the job site. IV. Document Retention and Review Audit: PSS will implement a "Project Close-out Checklist." Finance will not process the final retention payment for any construction project until the Labor Compliance Monitor certifies that all weekly certified payrolls have been received, reviewed, and filed. V. Updated Standard Operating Procedures and Training: PSS will finalize SOPs and policies internal controls with updated internal controls and procedures for required contract clauses and oversight. Checklists will be updated to include a specific control for Davis-Bacon reporting. Require all current contractors and those identified in this audit to submit certified payrolls for 2023 through the span of their contracts for all Davis-Bacon covered work. PSS Procurement and Supply staff will receive refresher training on cost principles annually regarding required contract clauses and documentation to support compliance with requirements. Proposed Completion Date: September 2026 Name of Contact Person and Title: Contact: Michael Jason A. Babauta, Chief Procurement & Supply Officer Email Address: michael.jason.babauta@cnmipss.org

View Audit 409786

Finding 1227833 (2023-015)

Material Weakness 2023

Commonwealth of the Northern Mariana Islands Public School System

MP

Matching / Level of Effort / Earmarking § 200.303

Finding No.: 2023-015 AL Program: COVID-19 84.425A/84.425X Education Stabilization Fund Area: Matching, Level of Effort, Earmarking Questioned Costs: Undeterminable Views of Auditee and Corrective Action Plan: Management’s Position: PSS Management does not agree with the finding. PSS has allocated a...

Finding No.: 2023-015 AL Program: COVID-19 84.425A/84.425X Education Stabilization Fund Area: Matching, Level of Effort, Earmarking Questioned Costs: Undeterminable Views of Auditee and Corrective Action Plan: Management’s Position: PSS Management does not agree with the finding. PSS has allocated and expended more than 20% on evidence-based interventions to address learning loss. Specifically, projects listed under the ARP expense report are mapped directly to learning loss categories (e.g. expenses for summer school, extended learning opportunities, high dosage tutors, etc.). Based on this documentation, we request that the audit finding be revised to reflect compliance. Proposed Completion Date: Resolution in progress and on track for completion by August 2026. Name of Contact Person and Title: Contact: Jacqueline Che, Federal Programs Officer Email Address: jacqueline.che@cnmipss.org

View Audit 409786

Finding 1227829 (2023-013)

Material Weakness 2023

Commonwealth of the Northern Mariana Islands Public School System

MP

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

Finding No.: 2023-013 AL Program: COVID-19 84.425A/84.425X Education Stabilization Fund Area: Activities Allowed/Unallowed, Allowable Costs/Cost Principles Questioned Costs: $-0- Views of Auditee and Corrective Action Plan: Management’s Position: PSS Management concurs with the findings. Financial a...

Finding No.: 2023-013 AL Program: COVID-19 84.425A/84.425X Education Stabilization Fund Area: Activities Allowed/Unallowed, Allowable Costs/Cost Principles Questioned Costs: $-0- Views of Auditee and Corrective Action Plan: Management’s Position: PSS Management concurs with the findings. Financial and Grants Management policies procedures were promulgated in SOPs on September 18, 2024. The financial management system was subsequently changed to Tyler Munis to conform with CNMI central government requirements which will enhance capabilities. The SOPs and the Tyler Munis implementation are under review by an external consultant and recommendations made to improve documentation of cost allowability have been received. Corrective Action Plan: I. Finalization of Allowability and Disbursement SOPs: PSS will finalize comprehensive Standard Operating Procedures (SOPs) and policies specifically governing allowability determinations and vendor payments. II. Enhanced Disbursement Controls: PSS is implementing a documented review and approval controls over the payment process. Before any check or ACH disbursement is finalized, a reviewer must verify that the payment amount agrees exactly with the approved invoice. This verification will be physically or digitally documented on the payment voucher to provide a clear audit trail of the pre-payment review. Proposed Completion Date: In progress for FY 2024 with full implementation and documentation processes expected to be completed in 2026. As part of this improvement, we are designing a standardized, documented review process to ensure all disbursements are verified against approved invoices prior to payment. Name of Contact Person and Title: Contact: Jonathan Aguon, Director of Finance Email Address: jonathan.aguon@cnmipss.org

View Audit 409786

Finding 1227825 (2023-010)

Material Weakness 2023

Commonwealth of the Northern Mariana Islands Public School System

MP

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

Finding No.: 2023-010 AL Program: 84.403 Consolidated Grants to the Outlying Areas Area: Allowable Costs/Cost Principles Questioned Costs: $-0- Views of Auditee and Corrective Action Plan: Management’s Position: PSS Management concurs with the findings. Financial and Grants Management policies proce...

Finding No.: 2023-010 AL Program: 84.403 Consolidated Grants to the Outlying Areas Area: Allowable Costs/Cost Principles Questioned Costs: $-0- Views of Auditee and Corrective Action Plan: Management’s Position: PSS Management concurs with the findings. Financial and Grants Management policies procedures were promulgated in SOPs on September 18, 2024. The financial management system was subsequently changed to Tyler Munis to conform with CNMI central government requirements which will enhance capabilities. The SOPs and the Tyler Munis implementation are under review by an external consultant and recommendations made to improve documentation of cost allowability have been received. Corrective Action Plan: I. Finalization of Allowability and Disbursement SOPs: PSS will finalize comprehensive Standard Operating Procedures (SOPs) and policies specifically governing allowability determinations and vendor payments. II. Enhanced Disbursement Controls: PSS is implementing a documented review and approval controls over the payment process. Before any check or ACH disbursement is finalized, a reviewer must verify that the payment amount agrees exactly with the approved invoice. This verification will be physically or digitally documented on the payment voucher to provide a clear audit trail of the pre-payment review. Proposed Completion Date: In progress for FY 2024 with full implementation and documentation processes expected to be completed in 2026. As part of this improvement, we are designing a standardized, documented review process to ensure all disbursements are verified against approved invoices prior to payment. Name of Contact Person and Title: Contact: Jonathan Aguon, Director of Finance Email Address: jonathan.aguon@cnmipss.org

View Audit 409786

Finding 1227822 (2023-008)

Material Weakness 2023

Commonwealth of the Northern Mariana Islands Public School System

MP

Matching / Level of Effort / Earmarking

Finding No.: 2023-008 AL Program: COVID-19 84.027 Special Education Cluster - Grants to States (IDEA, Part B) Area: Matching, Level of Effort, and Earmarking Questioned Costs: $345,823 Views of Auditee and Corrective Action Plan: Management’s Position: PSS Management concurs with the finding regardi...

Finding No.: 2023-008 AL Program: COVID-19 84.027 Special Education Cluster - Grants to States (IDEA, Part B) Area: Matching, Level of Effort, and Earmarking Questioned Costs: $345,823 Views of Auditee and Corrective Action Plan: Management’s Position: PSS Management concurs with the finding regarding the Maintenance of Financial Support (MFS) for IDEA Part B. We recognize that the inclusion of unverified encumbrances in the MFS calculation led to an inadvertent shortfall in actual expenditures compared to the required support levels. Corrective Action Plan: To ensure future compliance with IDEA §612(a)(18) and 34 CFR §300.163(a), PSS is implementing the following measures: I. Establishment of an MFS Monitoring Framework: The Finance Department, in coordination with the Special Education Program, will develop a formal MFS Tracking Ledger. This tool will track actual expenditures on a quarterly basis to ensure spending is on pace to meet or exceed the preceding fiscal year’s support levels. II. Verification of Encumbrances: PSS policy has been clarified to ensure that only "liquidated expenditures" (actual costs incurred) are used for MFS compliance reporting. Any encumbrances included in preliminary projections must be supported by valid contracts or purchase orders and must be reconciled against actual payments prior to final federal reporting. III. Enhanced Supervisory Review: PSS will develop an "MFS Certification" process. The Director of Finance will review and sign off on the expenditure reports at mid-year and year-end. This review will include a side-by-side comparison of current-year spending against the Part B Application requirements to identify potential shortfalls early. Proposed Completion Date: September 2026 Name of Contact Person and Title: Contact: Jonathan Aguon, Director of Finance Email Address: jonathan.aguon@cnmipss.org

View Audit 409786

Finding 1227814 (2023-003)

Material Weakness 2023

Commonwealth of the Northern Mariana Islands Public School System

MP

Allowable Costs / Cost Principles Subrecipient Monitoring School Nutrition Programs § 200.303

Finding No.: 2023-003 AL Program: 10.555 National School Lunch Program (NSLP) Area: Allowable Costs/Cost Principles Questioned Costs: $-0- Views of Auditee and Corrective Action Plan: Management’s Position: PSS Management concurs with the findings. Financial and Grants Management policies procedures...

Finding No.: 2023-003 AL Program: 10.555 National School Lunch Program (NSLP) Area: Allowable Costs/Cost Principles Questioned Costs: $-0- Views of Auditee and Corrective Action Plan: Management’s Position: PSS Management concurs with the findings. Financial and Grants Management policies procedures were promulgated in SOPs on September 18, 2024. The financial management system was subsequently changed to Tyler Munis to conform with CNMI central government requirements which will enhance capabilities. The SOPs and the Tyler Munis implementation are under review by an external consultant and recommendations made to improve documentation of cost allowability have been received. Corrective Action Plan: I. Finalization of Allowability and Disbursement SOPs: PSS will finalize comprehensive Standard Operating Procedures (SOPs) and policies specifically governing allowability determinations and vendor payments. II. Enhanced Disbursement Controls: PSS is implementing a documented review and approval controls over the payment process. Before any check or ACH disbursement is finalized, a reviewer must verify that the payment amount agrees exactly with the approved invoice. This verification will be physically or digitally documented on the payment voucher to provide a clear audit trail of the pre-payment review. Proposed Completion Date: In progress for FY 2024 with full implementation and documentation processes expected to be completed in 2026. As part of this improvement, we are designing a standardized, documented review process to ensure all disbursements are verified against approved invoices prior to payment. Name of Contact Person and Title: Contact: Jonathan Aguon, Director of Finance Email Address: jonathan.aguon@cnmipss.org

View Audit 409786

Finding 1226319 (2023-005)

Material Weakness 2023

Humboldt Park Health, Inc.

IL

Procurement, Suspension & Debarment Subrecipient Monitoring Matching / Level of Effort / Earmarking § 200.214 § 200.303 § 200.317 § 200.318 § 200.327

Condition: Controls were not sufficient to ensure that management has written policies and procedures surrounding procurement that align with Federal Procurement Standards outlined within the Uniform Guidance. Further, controls were not adequate to ensure that the history of procurement decisions wa...

Condition: Controls were not sufficient to ensure that management has written policies and procedures surrounding procurement that align with Federal Procurement Standards outlined within the Uniform Guidance. Further, controls were not adequate to ensure that the history of procurement decisions was documented. Additionally, controls were not sufficient to ensure checks for suspension and debarment were performed and documented before entering into a covered transaction with third parties. Planned Corrective Action: The Organization will update and formally adopt written procurement, suspension, and debarment policies and procedures to conform to Uniform Guidance requirements and implement procedures to ensure those policies are consistently followed and documented for all federally funded procurements. Contact person responsible for corrective action: Louise Arzu, Vice President, Finance Anticipated Completion Date: 9/30/2024

View Audit 408969

Finding 1226228 (2023-020)

Material Weakness 2023

Central State University

OH

Student Financial Aid Subrecipient Monitoring Eligibility

Corrective Action: The University is actively reviewing and updating policies and procedures regarding eligibility and disbursement controls. The University has implemented various new reports for monitoring and correcting over/under award situations. Responsible Person: Matthew Kirksey, Financial A...

Corrective Action: The University is actively reviewing and updating policies and procedures regarding eligibility and disbursement controls. The University has implemented various new reports for monitoring and correcting over/under award situations. Responsible Person: Matthew Kirksey, Financial Aid Director Completion Date: December 31, 2026

View Audit 408872

Finding 1226224 (2023-018)

Material Weakness 2023

Central State University

OH

Matching / Level of Effort / Earmarking

Corrective Action: The University will review the status of the matching funds and coordinate with the U.S. Department of Education if any adjustments are required. The questioned cost was resolved after June 30, 2023. Responsible Person: Vice President of Finance & Administration (Adrian Petway) Co...

Corrective Action: The University will review the status of the matching funds and coordinate with the U.S. Department of Education if any adjustments are required. The questioned cost was resolved after June 30, 2023. Responsible Person: Vice President of Finance & Administration (Adrian Petway) Completion Date: December 31, 2026

View Audit 408872

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