Corrective Action Plans

Finding 1219127 (2025-003)

Material Weakness 2025

MI

Special Tests & Provisions Significant Deficiency Matching / Level of Effort / Earmarking § 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 Material Weakness Matching / Level of Effort / Earmarking § 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 Cash Management Matching / Level of Effort / Earmarking § 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 Subrecipient Monitoring Material Weakness § 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

Finding 1218636 (2025-042)

Material Weakness 2025

State of Michigan

MI

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

Finding 2025-042 Medicaid Cluster, ALN 93.775, 93.777, and 93.778 - Benefits Monitoring Program Management Views MDHHS agrees with the finding. Planned Corrective Action For part a., for the one identified exception, MDHHS notified the MHP that the enrollment notification letter was not sent in a ti...

Finding 2025-042 Medicaid Cluster, ALN 93.775, 93.777, and 93.778 - Benefits Monitoring Program Management Views MDHHS agrees with the finding. Planned Corrective Action For part a., for the one identified exception, MDHHS notified the MHP that the enrollment notification letter was not sent in a timely manner. To ensure compliance moving forward, the MHP Benefits Monitoring Program (BMP) care managers were provided training in February 2026 on the BMP process, emphasizing the importance of verifying that enrollment notification letters are created and sent to members within the required timeframe. MDHHS believes this is an isolated incident, however, MDHHS obtained and reviewed each MHP’s documented step-by-step enrollment process to confirm that it includes the generation and distribution of the enrollment notification letter. For part b., MDHHS implemented a monitoring process in February 2026. As part of this process, the Enrolled Research Report is reviewed weekly to ensure all required 24 month reviews are identified and completed in a timely manner. Anticipated Completion Date Completed Responsible Individual(s) Torey Schlaufman, MDHHS

View Audit 404775

Finding 1218635 (2025-041)

Material Weakness 2025

State of Michigan

MI

Matching / Level of Effort / Earmarking Allowable Costs / Cost Principles § 200.516

Finding 2025-041 Medicaid Cluster, ALN 93.775, 93.777, and 93.778 - Medical Records Management Views MDHHS agrees with the finding. Planned Corrective Action MDHHS will continue to reinforce provider responsibilities related to documentation and record retention. As part of the annual communication ...

Finding 2025-041 Medicaid Cluster, ALN 93.775, 93.777, and 93.778 - Medical Records Management Views MDHHS agrees with the finding. Planned Corrective Action MDHHS will continue to reinforce provider responsibilities related to documentation and record retention. As part of the annual communication plan, MDHHS issues provider alerts twice per year to remind providers of the MDHHS record retention policy and post payment review process. The most recent provider alert was issued on January 5, 2026, and communicated to providers the importance of maintaining appropriate documentation for services provided. The provider was not responsive to MDHHS’s request for documentation for the exception identified. As a result, MDHHS voided the associated claim on February 11, 2026, recouped the full payment, and notified the provider of the action taken. Anticipated Completion Date Completed Responsible Individual(s) Alexis Bond, MDHHS

View Audit 404775

Finding 1218634 (2025-040)

Material Weakness 2025

State of Michigan

MI

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

Finding 2025-040 Medicaid Cluster, ALN 93.775, 93.777, and 93.778 - Practitioner Reimbursement Management Views MDHHS agrees with the finding. Planned Corrective Action In March 2025, MDHHS implemented an interface fix to resolve multiple system issues and eliminate limitations that contributed to r...

Finding 2025-040 Medicaid Cluster, ALN 93.775, 93.777, and 93.778 - Practitioner Reimbursement Management Views MDHHS agrees with the finding. Planned Corrective Action In March 2025, MDHHS implemented an interface fix to resolve multiple system issues and eliminate limitations that contributed to retroactive disenrollment. MDHHS has also submitted a work request for a system enhancement within Bridges to prevent recurrence of retroactive eligibility removals and improve the accuracy of eligibility across systems. In addition, MDHHS will evaluate additional potential processes to identify and resolve discrepancies between eligibility and enrollment data across systems, thereby reducing the risk of improper payments. Anticipated Completion Date MDHHS will determine an anticipated completion date after the work request has been prioritized. Responsible Individual(s) Jamy Hengesbach, MDHHS

View Audit 404775

Finding 1218633 (2025-039)

Material Weakness 2025

State of Michigan

MI

Matching / Level of Effort / Earmarking Allowable Costs / Cost Principles Eligibility § 200.516

Finding 2025-039 Medicaid Cluster, ALN 93.775, 93.777, and 93.778 - Ineligible HHP Payments Management Views MDHHS agrees with the finding. Planned Corrective Action MDHHS generates and distributes a monthly hospitalization report to adult services supervisors, who then distribute to adult services ...

Finding 2025-039 Medicaid Cluster, ALN 93.775, 93.777, and 93.778 - Ineligible HHP Payments Management Views MDHHS agrees with the finding. Planned Corrective Action MDHHS generates and distributes a monthly hospitalization report to adult services supervisors, who then distribute to adult services workers as part of the post-payment review process. During February 2025, MDHHS issued an Adult Services Notification to managers and directors reminding local office management of the expectation to thoroughly monitor and review the hospitalization reports to ensure timely and accurate action is taken by adult services workers. MDHHS also reissued the Home Help Recoupment Process training and procedural resources during February 2025 to adult services workers who manage Home Help cases to ensure process steps are consistently followed. In addition, during February 2026, MDHHS issued recoupments for the two clients identified by the Office of the Auditor General as part of the audit finding. During June 2025, MDHHS enhanced the monthly hospitalization report to improve data accuracy for identified service overlaps and ensure timely recovery of payments. However, MDHHS identified timing differences between the report run dates and the weekly schedule updates of CHAMPS hospitalization data that could result in incomplete hospitalization data within the monthly monitoring report. To ensure all relevant records are captured and promptly recover payments to clients hospitalized while receiving Home Help Program services who no longer met eligibility requirements, the timing of the report has been modified. Anticipated Completion Date Completed Responsible Individual(s) Elaina Brown, MDHHS

View Audit 404775

Finding 1218632 (2025-038)

Material Weakness 2025

State of Michigan

MI

Matching / Level of Effort / Earmarking Allowable Costs / Cost Principles Eligibility § 200.516

Finding 2025-038 Medicaid Cluster, ALN 93.775, 93.777, and 93.778 - Payments on Behalf of Ineligible Beneficiaries Management Views MDHHS agrees with the finding. Planned Corrective Action MDHHS continues to work with DTMB on the underlying issues in Bridges causing the overpayments, as well as deve...

Finding 2025-038 Medicaid Cluster, ALN 93.775, 93.777, and 93.778 - Payments on Behalf of Ineligible Beneficiaries Management Views MDHHS agrees with the finding. Planned Corrective Action MDHHS continues to work with DTMB on the underlying issues in Bridges causing the overpayments, as well as developing mitigation strategies to temporarily address the overpayment concerns while more permanent system solutions are developed. As part of the Departmental Work Intake Process, MDHHS submitted work requests for prioritization to implement larger system changes that will resolve the remaining synchronization issues. Anticipated Completion Date MDHHS will determine an anticipated completion date after the work requests have been prioritized. Responsible Individual(s) Jamy Hengesbach, MDHHS

View Audit 404775

Finding 1218631 (2025-037)

Material Weakness 2025

State of Michigan

MI

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

Finding 2025-037 Medicaid Cluster, ALN 93.775, 93.777, and 93.778 - Transitional Medicaid Eligibility Management Views MDHHS agrees that renewals for certain beneficiaries within the 16,682 of the total 375,345 beneficiaries receiving transitional medical assistance (TMA) during the audit period wer...

Finding 2025-037 Medicaid Cluster, ALN 93.775, 93.777, and 93.778 - Transitional Medicaid Eligibility Management Views MDHHS agrees that renewals for certain beneficiaries within the 16,682 of the total 375,345 beneficiaries receiving transitional medical assistance (TMA) during the audit period were not processed in a timely manner. MDHHS also notes that if a beneficiary was misclassified in an incorrect aid category but remained eligible to transition to another Medicaid aid category, no improper payments would have occurred. During the audit testing period, MDHHS had a limited timeframe to conduct manual validation making it infeasible to determine whether improper classifications were associated with all 16,682 beneficiaries identified. Planned Corrective Action As part of the regular eligibility redetermination process, MDHHS has already ended TMA for approximately 14,300 of the 16,682 beneficiaries cited as of January 2026. MDHHS will continue to complete a full review of the remaining beneficiaries to confirm the current eligibility status of these beneficiaries and assess whether they should remain in TMA, transition to another Medicaid aid category, or have their coverage closed if they are no longer eligible. While some individuals may no longer meet TMA criteria, many may be eligible for other Medicaid coverage, and this will be assessed through the follow-up review. MDHHS will complete the review, and establish an ongoing process to monitor redetermination metrics, by September 2026. In December 2025, MDHHS enhanced MI Reports functionality for redetermination reports used to manage the eligibility renewal process to improve timely processing of redeterminations. Also, MDHHS evaluated system functionality related to the timeliness of TMA renewals and identified that the system currently creates one alert for beneficiaries with multiple program renewals. To ensure TMA renewals are processed on a timely basis, MDHHS is collaborating with the Bridges technical team to implement a system enhancement that will generate a separate TMA-specific redetermination alert. This enhancement is expected to be implemented by December 2026. Anticipated Completion Date December 2026 Responsible Individual(s) Jamy Hengesbach, MDHHS Mariah Schaefer, MDHHS

View Audit 404775

Finding 1218630 (2025-036)

Material Weakness 2025

State of Michigan

MI

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

Finding 2025-036 Medicaid Cluster, ALN 93,775, 93.777, and 93.778 - MiAIMS User Access Management Views MDHHS agrees with the finding. Planned Corrective Action The MDHHS Access Management Section will continue to perform the monthly Michigan Adult Integrated Management System (MiAIMS)-to-DSA user r...

Finding 2025-036 Medicaid Cluster, ALN 93,775, 93.777, and 93.778 - MiAIMS User Access Management Views MDHHS agrees with the finding. Planned Corrective Action The MDHHS Access Management Section will continue to perform the monthly Michigan Adult Integrated Management System (MiAIMS)-to-DSA user reconciliation, resolve discrepancies, and provide LOSCs with a summary of results. As part of strengthening access controls, the MDHHS Access Management Section discontinued the practice of issuing advance notices prior to access termination, which previously allowed additional time for the user to complete recertification. Going forward, any active MiAIMS user who does not have a corresponding approved DSA request will have their access terminated as part of the monthly reconciliation process. Anticipated Completion Date Completed Responsible Individual(s) Cynthia Farrell, MDHHS Tim Kwast, MDHHS

View Audit 404775

Finding 1218550 (2025-033)

Material Weakness 2025

State of Michigan

MI

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

Finding 2025-033 CCDF Cluster, ALN 93.575 and 93.596 - Provider Health and Safety Requirements Management Views MiLEAP agrees with the finding. Planned Corrective Action To improve compliance and inspection timeliness, MiLEAP will take the following key steps: • Enhanced regional oversight: The Chil...

Finding 2025-033 CCDF Cluster, ALN 93.575 and 93.596 - Provider Health and Safety Requirements Management Views MiLEAP agrees with the finding. Planned Corrective Action To improve compliance and inspection timeliness, MiLEAP will take the following key steps: • Enhanced regional oversight: The Child Care Licensing Bureau (CCLB) will utilize monitoring features within the Child Care Hub Information Records Portal (CCHIRP) to proactively track inspection due dates and identify providers approaching annual inspection deadlines. Consultants, lead workers, and area managers will utilize automated reporting dashboards and task notifications to monitor upcoming inspections and overdue activities in real time. CCLB will establish standardized supervisory review procedures by November 30, 2026, requiring regional management to review inspection completion status on a monthly basis to ensure timely intervention when inspections are at risk of exceeding the required timeframe. In addition, CCLB leadership will monitor statewide inspection completion rates, overdue inspections, and regional trends through recurring data reviews to identify systemic issues and implement timely corrective actions. • Ongoing Technology and Process Improvements: CCLB will continue enhancing the functionality and oversight capabilities within CCHIRP to ensure the system supports current, efficient, and effective inspection processes. Ongoing system improvements will focus on strengthening workflow management, maintaining up-to-date task guidance and tracking mechanisms, and improving the accuracy and visibility of inspection timelines and required activities. Anticipated Completion Date Ongoing Responsible Individual(s) Courtney Adams, MiLEAP Scott Bettys, MiLEAP Erika Bigelow, MiLEAP Monica Sturdivant, MiLEAP

View Audit 404775

Finding 1218549 (2025-032)

Material Weakness 2025

State of Michigan

MI

Matching / Level of Effort / Earmarking § 200.516

Finding 2025-032 CCDF Cluster, ALN 93.575 and 93.596 - Client Eligibility Management Views MiLEAP and MDHHS agree with the finding. Planned Corrective Action MiLEAP and MDHHS ESA will continue to work together to help ensure compliance with client eligibility requirements by providing guidance on up...

Finding 2025-032 CCDF Cluster, ALN 93.575 and 93.596 - Client Eligibility Management Views MiLEAP and MDHHS agree with the finding. Planned Corrective Action MiLEAP and MDHHS ESA will continue to work together to help ensure compliance with client eligibility requirements by providing guidance on updated policies, processes and noted trends to local office and BSC staff. To increase subject-matter proficiency and improve consistency in eligibility determinations, MDHHS plans to begin implementing a Child Development and Care specialized staffing model within the Universal Case Load system statewide in July 2026. MDHHS Child Development and Care specialized staff will continue to utilize the Child Development and Care eligibility checklist for applications and redeterminations, and MDHHS will begin implementing a statewide review process based on identified errors by July 2026. MDHHS, in collaboration with MiLEAP, will continue to meet weekly to review common errors and root causes, address trends and questions received through the Child Development and Care Policy mailbox, and identify improvement and adjustment strategies. Anticipated Completion Date Ongoing Responsible Individual(s) Lisa Brewer-Walraven, MiLEAP Mariah Schaefer, MDHHS Gayle Vail, MDHHS

View Audit 404775

Finding 1218520 (2025-060)

Material Weakness 2025

State of Michigan

MI

Procurement, Suspension & Debarment Subrecipient Monitoring Reporting § 200.303

Finding 2025-060 Coronavirus Capital Projects Fund, ALN 21.029 Management Views LEO agrees with the finding. Planned Corrective Action The LEO Finance Division and the LEO Grants Division have identified the deficiencies that led to the audit finding. LEO will correct the internal FFATA reporting pr...

Finding 2025-060 Coronavirus Capital Projects Fund, ALN 21.029 Management Views LEO agrees with the finding. Planned Corrective Action The LEO Finance Division and the LEO Grants Division have identified the deficiencies that led to the audit finding. LEO will correct the internal FFATA reporting process to ensure that new and amended subaward contract information is received by the LEO Finance Division in a timely manner and in accordance with FFATA requirements. LEO will utilize the EGrAMS vendor to update software functionality that will generate an email notification to the LEO Finance Division when a grant agreement is finalized or amended. This notification will ensure communication with the LEO Finance Division occurs in a timely manner and in accordance with FFATA requirements. Anticipated Completion Date June 30, 2026 Responsible Individual(s) Jennifer Duffey, LEO Heidi Parker, LEO

View Audit 404775

Finding 1218503 (2025-058)

Material Weakness 2025

State of Michigan

MI

Reporting Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties § 200.303 § 200.326

Finding 2025-058 Airport Improvement Program, Infrastructure Investment and Jobs Act Programs, and COVID-19 Airports Programs, ALN 20.106 Management Views MDOT agrees that it did not ensure weekly certified payrolls were obtained from contractors. Planned Corrective Action MDOT will provide training...

Finding 2025-058 Airport Improvement Program, Infrastructure Investment and Jobs Act Programs, and COVID-19 Airports Programs, ALN 20.106 Management Views MDOT agrees that it did not ensure weekly certified payrolls were obtained from contractors. Planned Corrective Action MDOT will provide training and guidance to pertinent staff to help ensure contract compliance and that weekly certified payrolls are obtained from contractors. In addition, MDOT will review existing procedures to assess whether updates are needed. Anticipated Completion Date September 30, 2026 Responsible Individual(s) Bryan Budds, MDOT

View Audit 404775

Finding 1218486 (2025-056)

Material Weakness 2025

State of Michigan

MI

Reporting Matching / Level of Effort / Earmarking § 200.303

Finding 2025-056 WIOA Cluster, ALN 17.258, 17.259, and 17.278 Management Views LEO agrees with the finding. LEO management recognizes the importance of timely and accurate FFATA reporting and acknowledges that internal processes can be strengthened to better support reporting consistency, particular...

Finding 2025-056 WIOA Cluster, ALN 17.258, 17.259, and 17.278 Management Views LEO agrees with the finding. LEO management recognizes the importance of timely and accurate FFATA reporting and acknowledges that internal processes can be strengthened to better support reporting consistency, particularly during high-volume periods such as quarter-end. LEO remains committed to compliance and continuous improvement. Planned Corrective Action LEO will improve existing FFATA reporting processes by reinforcing internal timelines, clarifying staff responsibilities, and implementing an additional review step prior to submission to help ensure subaward information is reported timely and accurately. Management will train appropriate staff responsible for FFATA reporting to strengthen understanding of reporting requirements, deadlines, and review expectations. These improvements are intended to enhance process consistency, improve communication, and reduce the likelihood of future timing or minor reporting discrepancies. LEO will enhance documented procedures that outline specific FFATA reporting processes related to the Workforce Innovation and Opportunity Act (WIOA). Anticipated Completion Date September 30, 2026 Responsible Individual(s) Arica Johnson, LEO

View Audit 404775

Finding 1218466 (2025-001)

Material Weakness 2025

EAGLE LAKE WATER & SEWER DISTRICT

ME

Procurement, Suspension & Debarment Significant Deficiency Matching / Level of Effort / Earmarking § 200.318

CORRECTIVE ACTION PLAN Concerning Finding 2025-001 - Procurement Contact Person Responsible for Corrective Action: Darcy K. Labbe, Superintendent Corrective Action: The Eagle Lake Sewer District will take the following actions to address finding 2025-001. A procurement policy was drawn up and implem...

CORRECTIVE ACTION PLAN Concerning Finding 2025-001 - Procurement Contact Person Responsible for Corrective Action: Darcy K. Labbe, Superintendent Corrective Action: The Eagle Lake Sewer District will take the following actions to address finding 2025-001. A procurement policy was drawn up and implemented on February 23, 2026. Anticipated Completion Date: A procurement policy was signed by the Board of Trustees and implemented on February 23, 2026.

View Audit 404756

Finding 1218419 (2025-003)

Material Weakness 2025

Minnesota Prairie County Alliance

MN

Eligibility Significant Deficiency Matching / Level of Effort / Earmarking

ELIGIBILITY DETERMINATION Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Grants to States for Medicaid (Medicaid Cluster) Assistance Listing Number: 93. 778 Federal Award Identification Numbers and Year: 2505MN5MAP and 2505MN5ADM, 2025 Pass-Through Agency: Minneso...

ELIGIBILITY DETERMINATION Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Grants to States for Medicaid (Medicaid Cluster) Assistance Listing Number: 93. 778 Federal Award Identification Numbers and Year: 2505MN5MAP and 2505MN5ADM, 2025 Pass-Through Agency: Minnesota Department of Human Services Pass-Through Numbers: 2505MN5MAP and 2505MN5ADM Compliance Requirement Affected: Eligibility Award Period: Year-Ended December 31, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Recommendation: It is recommended the Agency implement procedures to ensure the citizenship, asset, and income verification documentation in the casefiles be retained and that it matches the METS eligibility system. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The Agency will review procedures and show staff proper documentation and entry into METS and staff will be reminded to perform reviews. Name of the contact person responsible for corrective action plan: Waylon Welvaert, Finance Manager Planned completion date for corrective action plan: December 31, 2026

View Audit 404688

Finding 1218412 (2025-002)

Material Weakness 2025

Evangeline Booth Residence, Inc., A Florida Corporation

FL

Special Tests & Provisions HUD Housing Programs Matching / Level of Effort / Earmarking

Project Legal Name: Evangeline Booth Residence, Inc., A Florida Corporation HUD Project No.: 063-EE011-WAH Audit Firm: CohnReznick LLP Period covered by the audit: 10/1/24-9/30/25 Corrective Action Plan prepared by: Name: Philip Gesner Position: Financial Project Manager, USA Southern Territory Fina...

Project Legal Name: Evangeline Booth Residence, Inc., A Florida Corporation HUD Project No.: 063-EE011-WAH Audit Firm: CohnReznick LLP Period covered by the audit: 10/1/24-9/30/25 Corrective Action Plan prepared by: Name: Philip Gesner Position: Financial Project Manager, USA Southern Territory Finance Department Telephone Number: 470-816-5977 2. Finding 2025-002 a. Comments on the Finding and Each Recommendation The auditee agrees with the finding. The auditee agrees with the recommendation to review the project budget to determine if nonessential costs can be cut (or request a loan from the owner) to ensure that the replacement reserve is funded in accordance with the terms of the regulatory agreement and the recommendation to obtain from HUD a waiver for the missing replacement reserve deposits if possible, or fund the missing deposits. b. Action(s) Taken or Planned on the Finding Due to significant delays in receipt of PRAC funds for over a year, management suspended making the deposits to the reserve until PRAC funding was replenished. Management also borrowed funds from the replacement reserve in 2024 which funds were repaid during the year ended September 30, 2024 once past-due PRAC funds were received. Due to ongoing issues with PRAC funding, management continues to be behind on making the monthly deposits during the year ended September 30, 2025.

View Audit 404683

Finding 1218383 (2025-004)

Material Weakness 2025

Catherine Booth Friendship House Residence Inc., A Texas Corporation

TX

Special Tests & Provisions Cash Management HUD Housing Programs

4. Finding 2025-004 a. Comments on the Finding and Each Recommendation The auditee agrees with the finding. The auditee agrees with the recommendation to reimburse the amount due to the project and establish procedures to ensure reimbursement for shared costs and related receivables are made timely ...

4. Finding 2025-004 a. Comments on the Finding and Each Recommendation The auditee agrees with the finding. The auditee agrees with the recommendation to reimburse the amount due to the project and establish procedures to ensure reimbursement for shared costs and related receivables are made timely in accordance with established policy. b. Action(s) Taken or Planned on the Finding We will implement procedures to ensure shared costs are reimbursed on a consistent and regular basis.

View Audit 404677

Corrective Action Plans

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