Corrective Action Plans

Finding 397416 (2023-053)

Material Weakness 2023

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Allowable Costs / Cost Principles Eligibility

Finding: The Department of Social and Health Services did not have adequate internal controls over and did not comply with federal requirements to ensure subrecipients of the Refugee and Entrant Assistance programs received required single audits, and that it followed up on findings and issued mana...

Finding: The Department of Social and Health Services did not have adequate internal controls over and did not comply with federal requirements to ensure subrecipients of the Refugee and Entrant Assistance programs received required single audits, and that it followed up on findings and issued management decisions. Questioned Costs: Assistance Listing # 93.566 Amount $0 Status: Corrective action in progress Corrective Action: The Department concurs with the finding. By September 2024, the Department’s Office of Refugee and Immigrant Assistance (ORIA) will follow up with the remaining 35 subrecipients and require the completion of the Subrecipient Federal Financial Assistance form for fiscal year 2023, as needed. By November 2024, ORIA will: • Follow up with the remaining 35 subrecipients to verify that they completed a single audit if they received $750,000 or more in federal assistance. • Inform any subrecipients that have not been audited about the single audit requirement. • Work with Economic Services Administration (ESA) accounting staff to review all completed audit reports and, for any findings found, issue a management decision on the effectiveness of the subrecipients’ proposed corrective actions to address the findings. • Work with ESA accounting unit to establish and implement effective internal controls and written procedures to: o Identify subrecipients who receive $750,000 or more annually in federal assistance from all sources. o Verify if subrecipients complete required audits, if applicable, and take appropriate action if audits are not completed. o Review single and program-specific audit reports for findings. o Write and issue a management decision, when appropriate, within six months outlining the Department’s determination of the adequacy of the subrecipient’s proposed corrective actions to address the finding. o Monitor the subrecipient’s corrective action plan for timely and effective completion. By December 2024, ESA accounting staff will track and monitor subrecipient activities to ensure appropriate and timely corrective action is taken to resolve single and programmatic audit findings. By March 2025, ORIA and ESA accounting unit will train all program staff responsible for monitoring the new procedures to ensure a full understanding of the shared responsibilities for compliance with department policies. Completion Date: Estimated March 2025 Agency Contact: Richard Meyer External Audit Compliance Manager PO Box 45804 Olympia, WA 98504-5804 (360) 664-6027 Richard.Meyer@dshs.wa.gov

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Finding 397405 (2023-048)

Material Weakness 2023

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Equipment & Real Property Management Internal Control / Segregation of Duties

Finding: The Department of Health did not have adequate internal controls over and did not comply with reporting requirements for the Epidemiology and Laboratory Capacity for Infectious Diseases program. Questioned Costs: Assistance Listing # 93.323 93.323 COVID-19 Amount $0 Status: Correc...

Finding: The Department of Health did not have adequate internal controls over and did not comply with reporting requirements for the Epidemiology and Laboratory Capacity for Infectious Diseases program. Questioned Costs: Assistance Listing # 93.323 93.323 COVID-19 Amount $0 Status: Corrective action complete Corrective Action: In response to the fiscal year 2022 audit recommendations, the Department implemented procedures to ensure management review and approval of the fiscal report, Case Investigation and Contact Tracing (CICT) report, and the Reopening Schools testing report are documented and retained before submission to the federal grantor. At the beginning of fiscal year 2023, the auditors were still conducting field work for the prior year’s audit. Procedures were not in place at that time when reports were submitted to the Case Risk and Exposure Surveillance Tool and RedCap systems. As a result, corrective actions were not fully implemented during the current audit year. The CICT reporting was discontinued as of August 2023, and the Reopening Schools project ended after July 31, 2023. The conditions noted in this finding were previously reported in finding 2022-034. Completion Date: January 2023 Agency Contact: Jeff Arbuckle External Audit Manager PO Box 47890 Olympia, WA 98504-7890 (360) 701-0798 Jeff.Arbuckle@doh.wa.gov

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Finding 397352 (2023-038)

Material Weakness 2023

State of Washington C/o Office of Financial Management

WA

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

Finding: The Office of Superintendent of Public Instruction did not have adequate internal controls over and did not comply with federal reporting requirements for the Education Stabilization Fund program. Questioned Costs: Assistance Listing # 84.425D 84.425R 84.425U 84.425V 84.425W Amount $0 ...

Finding: The Office of Superintendent of Public Instruction did not have adequate internal controls over and did not comply with federal reporting requirements for the Education Stabilization Fund program. Questioned Costs: Assistance Listing # 84.425D 84.425R 84.425U 84.425V 84.425W Amount $0 Status: Corrective action in progress Corrective Action: Certain data elements missing on the annual Elementary and Secondary School Emergency Relief (ESSER) performance report was not due to lack of internal controls, but rather a result of: • Late publication of the federal reporting template which did not allow timely collection of cost details from school districts. • Non-alignment of reporting time frame with school district fiscal year and the decision against assumptions of state level expenditure for reporting. To address the audit recommendations, the Office is organizing a series of webinars and trainings for school districts, so they are prepared to annually submit required key information directly to the Office for ESSER reporting. Through these training events, the Office’s fiscal team can answer questions and assist districts to ensure timely and accurate reporting and comply with federal requirements. The Office has been having ongoing conversations with the U.S. Department of Education regarding federal reporting on the ESSER funds. At this time, there is no indication that the grantor will request the information to be resubmitted. Completion Date: Estimated June 2024 Agency Contact: TJ Kelly Chief Financial Officer PO Box 47200 Olympia, WA 98504-7200 (360) 725-6301 Thomas.Kelly@k12.wa.us

View Audit 306534

Finding 397351 (2023-037)

Material Weakness 2023

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Internal Control / Segregation of Duties Matching / Level of Effort / Earmarking

Finding: The Office of Financial Management did not have adequate internal controls over and did not comply with federal level of effort requirements for the Education Stabilization Fund program. Questioned Costs: Assistance Listing # 84.425D 84.425R 84.425U 84.425V 84.425W Amount $0 Status: C...

Finding: The Office of Financial Management did not have adequate internal controls over and did not comply with federal level of effort requirements for the Education Stabilization Fund program. Questioned Costs: Assistance Listing # 84.425D 84.425R 84.425U 84.425V 84.425W Amount $0 Status: Corrective action not required Corrective Action: The Office does not concur with the audit finding. The Office maintains monthly monitoring details on agency expenditures. The expenditure data has not changed since the close of the fiscal year. The finding was based on preliminary information and data that the auditors obtained in November 2023. In December 2023, the Office submitted updated expenditure data to the Office of Elementary and Secondary Education (OESE) in accordance with OESE guidance to correctly include every budgeted funding source in the maintenance of effort (MOE) calculations. The Office met the MOE requirement for fiscal year 2023; therefore, there is no need for a waiver request. The Office will also continue to work with the Legislature, which is the state-level authority for state appropriations, to ensure the state maintains the MOE requirements. Completion Date: Not applicable Agency Contact: Sara Rupe Deputy Statewide Accounting Director PO Box 43127 Olympia, WA 98504-3127 (360) 974-9252 sara.rupe@ofm.wa.gov

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Finding 397220 (2023-030)

Material Weakness 2023

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Internal Control / Segregation of Duties Procurement, Suspension & Debarment § 200.328

Finding: The Office of Financial Management did not have adequate internal controls over and did not comply with reporting requirements for the Coronavirus State and Local Fiscal Recovery Funds. Questioned Costs: Assistance Listing # 21.027 COVID-19 Amount $0 Status: Corrective action comp...

Finding: The Office of Financial Management did not have adequate internal controls over and did not comply with reporting requirements for the Coronavirus State and Local Fiscal Recovery Funds. Questioned Costs: Assistance Listing # 21.027 COVID-19 Amount $0 Status: Corrective action complete Corrective Action: The Office has continued to strengthen internal controls for the Coronavirus State and Local Fiscal Recovery Fund (SLFRF) reporting to ensure compliance with the federal requirements. The Office will continue to: • Monitor updates to the U.S Treasury’s Project and Expenditure Report User Guide. • Improve the quarterly reporting template and assist state agencies during the reporting process. • Communicate with agencies to remind them of the requirement to maintain adequate supporting documentation for all reports, including quarterly reported obligations. • Ensure reported amounts, including corrections or adjustments made during the reporting period, are properly tracked and documented for the subsequent reporting cycles. • Perform reconciliations of reported expenditures to ensure agency expenditures are accurately reported, allowing for adjustments/ corrections required due to issues with the reporting system. • Ensure reported expenditures and supporting accounting records are adequately reviewed by management before the information is uploaded to the federal reporting system. • Document correspondences with the U.S. Treasury when system errors are identified and resolutions recommended by the grantor, if received. The conditions noted in this finding were previously reported in finding 2022-020. Completion Date: January 2024 Agency Contact: Sara Rupe Deputy Statewide Accounting Director PO Box 43127 Olympia, WA 98504-3127 (360) 974-9252 sara.rupe@ofm.wa.gov

View Audit 306534

Finding 397211 (2023-025)

Material Weakness 2023

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Allowable Costs / Cost Principles Reporting

Finding: The Housing Finance Commission did not have adequate internal controls over and did not comply with reporting requirements for the Homeowner Assistance Fund program. Questioned Costs: Assistance Listing # 21.026 COVID-19 Amount $0 Status: Corrective action in progress Corrective...

Finding: The Housing Finance Commission did not have adequate internal controls over and did not comply with reporting requirements for the Homeowner Assistance Fund program. Questioned Costs: Assistance Listing # 21.026 COVID-19 Amount $0 Status: Corrective action in progress Corrective Action: To address the deficiencies identified by the auditors in completing annual performance reports, the Commission has taken the following corrective actions to strengthen controls over reporting for the Homeowner Assistance Fund (HAF) program: • Homeownership Division and Finance Division staff will perform regular reconciliation of records to identify any discrepancies and to ensure all records are complete and accurate. • The records maintained by the Finance Division, specifically the general ledgers, are the designated source of financial data for the quarterly and annual reports for the Washington HAF program. • Third parties are required to develop or update a program manual regarding data used for reporting purposes by June 30, 2024. The manual needs to incorporate recommendations of the audit finding. • Any supporting data obtained from a third party needs to be vetted by the third party and the Homeownership Division staff. • Leadership (division manager or above) will perform final review of data as well as the quarterly or annual report to be submitted to the grantor. By June 30, 2024, the Commission will consult with the U.S. Department of the Treasury to determine if revision and resubmission of the reports are necessary to correct amounts reported. The Commission will follow the audit resolution process as determined by the grantor. Completion Date: Estimated June 2024 Agency Contact: Lucas Loranger Senior Finance Director 1000 Second Ave, Suite 2700 Seattle, WA 98104-3601 (206) 464-7139 Lucas.Loranger@wshfc.org

View Audit 306534

Finding 397210 (2023-024)

Material Weakness 2023

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Allowable Costs / Cost Principles Reporting

Finding: The Housing Finance Commission did not have adequate internal controls over and did not comply with reporting requirements for the Homeowner Assistance Fund program. Questioned Costs: Assistance Listing # 21.026 COVID-19 Amount $0 Status: Corrective action in progress Corrective...

Finding: The Housing Finance Commission did not have adequate internal controls over and did not comply with reporting requirements for the Homeowner Assistance Fund program. Questioned Costs: Assistance Listing # 21.026 COVID-19 Amount $0 Status: Corrective action in progress Corrective Action: To address the deficiencies identified by the auditors in completing quarterly performance reports, the Commission has taken the following corrective actions to strengthen controls over reporting for the Homeowner Assistance Fund (HAF) program: • The Homeownership Division and Finance Division staff will perform regular reconciliation of records to identify any discrepancies and to ensure all records are complete and accurate. • The records maintained by the Finance Division, specifically the general ledgers, are the designated source of financial data for the quarterly and annual reports for the Washington HAF program. • Third parties are required to develop or update the program manual regarding data used for reporting purposes by June 30, 2024. The manual needs to incorporate recommendations of the audit finding. • Any supporting data obtained from a third party needs to be vetted by the third party and the Homeownership Division staff. • Leadership (division manager or above) will perform final review of data as well as the quarterly or annual report to be submitted to the grantor. By June 30, 2024, the Commission will consult with the U.S. Department of the Treasury to determine if revision and resubmission of the reports are necessary to correct amounts reported. The Commission will follow the audit resolution process as determined by the grantor. Completion Date: Estimated June 2024 Agency Contact: Lucas Loranger Senior Finance Director 1000 Second Ave, Suite 2700 Seattle, WA 98104-3601 (206) 464-7139 Lucas.Loranger@wshfc.org

View Audit 306534

Finding 397209 (2023-023)

Material Weakness 2023

State of Washington C/o Office of Financial Management

WA

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

Finding: The Housing Finance Commission did not have adequate internal controls over earmarking requirements for the Homeowner Assistance Fund program. Questioned Costs: Assistance Listing # 21.026 COVID-19 Amount $0 Status: Corrective action in progress Corrective Action: The Commissio...

Finding: The Housing Finance Commission did not have adequate internal controls over earmarking requirements for the Homeowner Assistance Fund program. Questioned Costs: Assistance Listing # 21.026 COVID-19 Amount $0 Status: Corrective action in progress Corrective Action: The Commission will take the following corrective actions to strengthen controls over earmarking requirements for the Homeowner Assistance Fund (HAF) program: • Develop a system to track and monitor expenditures in relation to overall program expenditures to ensure earmarking requirements are within allowable parameters. • Select an increased percentage of approved, denied, and withdrawn HAF applications that have previously been reviewed by the contractor, as part of the Quality Control process, for a secondary review by program staff. • Review a selection of HAF applications independent of the Quality Control process performed by the contractor. • Review a selection of approved HAF applications prior to disbursing funds to confirm eligibility determinations are proper. Completion Date: Estimated June 2024 Agency Contact: Lucas Loranger Senior Finance Director 1000 Second Ave, Suite 2700 Seattle, WA 98104-3601 (206) 464-7139 Lucas.Loranger@wshfc.org

View Audit 306534

Finding 397208 (2023-022)

Material Weakness 2023

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Eligibility Internal Control / Segregation of Duties

Finding: The Housing Finance Commission did not have adequate internal controls over eligibility requirements for the Homeowner Assistance Fund program. Questioned Costs: Assistance Listing # 21.026 COVID-19 Amount $0 Status: Corrective action in progress Corrective Action: The Commissi...

Finding: The Housing Finance Commission did not have adequate internal controls over eligibility requirements for the Homeowner Assistance Fund program. Questioned Costs: Assistance Listing # 21.026 COVID-19 Amount $0 Status: Corrective action in progress Corrective Action: The Commission will take the following corrective actions to strengthen controls over eligibility requirements for the Homeowner Assistance Fund (HAF) program: • Select an increased percentage of approved, denied, and withdrawn HAF applications that have previously been reviewed by the contractor, as part of the Quality Control process, for a secondary review by program staff. • Review a selection of HAF applications independent of the Quality Control process performed by the contractor. • Review a selection of approved HAF applications prior to disbursing funds to confirm eligibility determinations are proper. Completion Date: Estimated June 2024 Agency Contact: Lucas Loranger Senior Finance Director 1000 Second Ave, Suite 2700 Seattle, WA 98104-3601 (206) 464-7139 Lucas.Loranger@wshfc.org

View Audit 306534

Finding 397197 (2023-014)

Material Weakness 2023

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Internal Control / Segregation of Duties Special Tests & Provisions

Finding: The Washington State Department of Transportation did not have adequate internal controls over and did not comply with quality assurance program requirements to ensure materials conformed to approved plans and specifications, and that only qualified personnel performed testing for projects...

Finding: The Washington State Department of Transportation did not have adequate internal controls over and did not comply with quality assurance program requirements to ensure materials conformed to approved plans and specifications, and that only qualified personnel performed testing for projects funded by the Highway Planning and Construction Cluster. Questioned Costs: Assistance Listing # 20.205 Amount $0 Status: Corrective action in progress Corrective Action: The Department is committed to ensuring that our grant programs comply with federal regulations related to quality assurance (QA) requirements and safeguarding that materials and workmanship conform to approved plans and specifications through testing, inspections, or certifications. The Department has worked closely with the Federal Highway Administration (FHWA) on our QA program and continues to receive feedback on the strength of our program. The Department has been working towards replacement of the Record of Materials (ROM) legacy system; therefore, it was not practical to modify the system to help correct issues previously reported in the fiscal year 2022 audit. During fiscal year 2023, the Department eliminated the practice requiring updates to the ROM within 30 days of payment and instead relied on the required documentation as evidence of proper materials acceptance. Due to the timing of implementation, these changes were not fully reflected in the current year’s audit. In January 2023, as a result of recommendations from the fiscal year 2022 audit, the Department modified its practice related to how tester data is reviewed and entered into the tester certification tracking system. All offices now funnel tester data to the Headquarters Quality Assurance Program for review and entry. These procedure changes were communicated to appropriate staff and are reflected in the Construction Manual, which was reviewed and approved by FHWA. The Department is also assessing replacement of additional software legacy programs associated with the QA program. The Department will continue to improve the QA program while waiting for the new software programs to be fully developed. To address the audit recommendations, the Department’s Construction Division will examine current policies and procedures/practices related to the audit issues. The Department will: • Update policies and procedures, including the Department’s Construction Manual (M46-01), as needed to ensure staff practices meet federal regulations. Updates will also include other clarifications to address documentation and evidence of compliance, and a reasonable level of controls regarding materials testing, inspections, certification, acceptance, and tester certifications. Completion Date: Agency Contact: • Obtain approval of updates to the Construction Manual from the FHWA. • Communicate changes in policies and procedures to division staff and stakeholders. • Provide training to Project Engineering Office staff to emphasize QA program requirements. The conditions noted in this finding were previously reported in findings 2022-011, 2021-011, 2020-017 and 2019-019. Completion Date: Estimated June 2024 Agency Contact: Jesse Daniels External Audit Liaison PO Box 47320 Olympia, WA 98504 (360) 705-7035 danielje@wsdot.wa.gov

View Audit 306534

Finding 397196 (2023-013)

Material Weakness 2023

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Internal Control / Segregation of Duties Special Tests & Provisions

Finding: The Washington State Department of Transportation did not have adequate internal controls over and did not comply with requirements to collect certified payrolls from contractors on projects funded by the Highway Planning and Construction program. Questioned Costs: Assistance Listing # ...

Finding: The Washington State Department of Transportation did not have adequate internal controls over and did not comply with requirements to collect certified payrolls from contractors on projects funded by the Highway Planning and Construction program. Questioned Costs: Assistance Listing # 20.205 Amount $0 Status: Corrective action in progress Corrective Action: In April 2019 and July 2020, the Department received management decision letters from the Federal Highway Administration (FHWA) in response to similar findings for the fiscal years 2018 and 2019, respectively, which stated: • FHWA approved the Department’s Construction Manual and Standard Specifications and confirmed that documented procedures contain the necessary controls to ensure reasonable compliance with 29 CFR 5.5 and the Davis-Bacon and Related Acts. • FHWA agreed that current processes in place are reasonable and satisfy the intent of the Department of Labor’s certified payroll requirements. • FHWA considers this finding to be resolved. The Department continues to strive for improvements in this area. To further address the audit recommendations, the Department is planning on taking the following actions by December 2024: • Update the Construction Manual to include language for certified payroll collection requirements when no work is performed on federal projects. • Review and update the Construction Manual, as needed, to clarify the authority to withhold payments regarding federal wage administration. • Standardize the required frequency of checking for certified payroll collection and the methods to document tracking. • Define “timely,” given the circumstances surrounding weekly collection of certified payrolls and sanctions on a monthly pay estimate, including: o Defining the timeline when the Department must communicate overdue certified payroll to the contractor and the allowable methods of that communication. o Defining the timeline for determining when the Department must consider imposing sanctions on the contractor after a certified payroll is overdue. o Defining the minimum required documentation that sanctions (e.g., partial deferral of payment) were considered against the contractor regarding an overdue certified payroll. • Communicate any changes to the Construction Manual to appropriate construction staff and partners. • Continue to work with our federal grantor, FHWA, for any further actions needed to resolve this finding. Completion Date: Agency Contact: Estimated December 2024 Jesse Daniels External Audit Liaison PO Box 47320 Olympia, WA 98504-7320 (360) 705-7035 danielje@wsdot.wa.gov

View Audit 306534

Finding 397189 (2023-010)

Material Weakness 2023

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Internal Control / Segregation of Duties Special Tests & Provisions

Finding: The Employment Security Department did not have adequate internal controls over and did not comply with requirements to ensure it profiled all claimants under the Unemployment Insurance program to identify people likely to need reemployment services and ensure staff providing those service...

Finding: The Employment Security Department did not have adequate internal controls over and did not comply with requirements to ensure it profiled all claimants under the Unemployment Insurance program to identify people likely to need reemployment services and ensure staff providing those services received required training. Questioned Costs: Assistance Listing # 17.225 17.225 COVID-19 Amount $0 Status: Corrective action in progress Corrective Action: The Department concurs with the recommendation to review the calculation of the profile score within the Unemployment Tax and Benefit (UTAB) system. The Department will explore a plan and review resource allocations to more effectively validate the profile score to ensure that coefficient values are correctly determined and assigned by the UTAB system. The Department partially concurs with the recommendation to reconcile the UTAB and Reemployment Appointment Scheduler (RAS) interface. There is currently a process in place to notify the RAS team if a record fails at the time of data transmission between UTAB and RAS. The Department will review its processes to verify the complete UTAB exit file was successfully received by RAS. The Department does not concur with the recommendation to implement additional internal controls over the claimant profiling process. The Department has coordinated closely with the U.S. Department of Labor (USDOL) to conduct the randomized control trial (RCT) to evaluate the Reemployment Services and Eligibility Assessments (RESEA). The Department has written approval from USDOL to utilize this method concurrently with the program’s established process. All program-eligible applicants are scored and provided a risk profile score based on both established standards and a random score for the purposes of carrying out the RCT. The Department does not concur with the recommendation to ensure all employees receive the required RESEA training before providing reemployment screening services to claimants. The Department has internal controls in place to ensure training requirements are met and staff are not granted access to schedule appointments for RESEA services without first receiving the required training. The exceptions noted by the auditors relate to the annual refresher training. In the fall of 2022, the Department implemented procedures to formally track the refresher training completed by RESEA staff. The audit exceptions identified were for two staff not currently providing RESEA services to clients. These individuals will receive the refresher training prior to providing RESEA services going forward. Completion Date: Estimated April 2025 Agency Contact: Jay Summers External Audit Manager PO Box 9046 Olympia, WA 98507-9046 (360) 529-6718 Joshua.Summers@esd.wa.gov

View Audit 306534

Finding 397188 (2023-009)

Material Weakness 2023

State of Washington C/o Office of Financial Management

WA

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

Finding: The Employment Security Department did not have adequate internal controls over and did not comply with federal requirements to conduct case reviews for the Benefit Accuracy Measurement program of the Unemployment Insurance program in a timely manner. Questioned Costs: Assistance Listin...

Finding: The Employment Security Department did not have adequate internal controls over and did not comply with federal requirements to conduct case reviews for the Benefit Accuracy Measurement program of the Unemployment Insurance program in a timely manner. Questioned Costs: Assistance Listing # 17.225 17.225 COVID-19 Amount $0 Status: Corrective action in progress Corrective Action: Historically, the Benefit Accuracy Measurement (BAM) unit has been challenged to maintain full levels of staffing. Staff turnover, long training requirements, and unique skill sets make these positions difficult to maintain. During the prior audit period, the Department was in a hiring freeze for Unemployment Insurance administrative funding, furthering the challenge to fully staff the unit and meet program requirements. The hiring freeze was lifted in April 2023 and the unit began filling vacant positions in May 2023. Due to the lengthy training timelines for new positions, the Department anticipated the unit would not meet federally mandated performance measures for case reviews for state fiscal year 2023. The Department continues to partner and frequently communicate with the U.S. Department of Labor (USDOL) Regional Offices to discuss staffing and training models. The Quality Assurance Manager and the Case Review Supervisor are committed to routinely monitor caseload, workload, and the overall assurance of meeting the BAM operations performance goals and measures as set forth by USDOL. The conditions noted in this finding were previously reported in findings 2022-006, 2021-005, and 2020-011. Completion Date: Estimated March 2025 Agency Contact: Jay Summers External Audit Manager PO Box 9046 Olympia, WA 98507-9046 (360) 529-6718 Joshua.Summers@esd.wa.gov

View Audit 306534

Finding 397187 (2023-008)

Significant Deficiency 2023

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Internal Control / Segregation of Duties Equipment & Real Property Management

Finding: The Employment Security Department did not have adequate internal controls to ensure it submitted accurate monthly reports for the Unemployment Insurance program. Questioned Costs: Assistance Listing # 17.225 17.225 COVID-19 Amount $0 Status: Corrective action complete Correctiv...

Finding: The Employment Security Department did not have adequate internal controls to ensure it submitted accurate monthly reports for the Unemployment Insurance program. Questioned Costs: Assistance Listing # 17.225 17.225 COVID-19 Amount $0 Status: Corrective action complete Corrective Action: In response to the prior year’s finding, the Department immediately implemented the secondary review of the monthly ETA 9055 performance reports. However, the auditor’s recommendation and the Department’s implementation occurred after state fiscal year 2023 had begun. The Department expects adequate internal controls to be in place and functioning for fiscal year 2024 and onward. The conditions noted in this finding were previously reported in finding 2022-005. Completion Date: May 2023 Agency Contact: Jay Summers External Audit Manager PO Box 9046 Olympia, WA 98507-9046 (360) 529-6718 Joshua.Summers@esd.wa.gov

View Audit 306534

Finding 397186 (2023-007)

Material Weakness 2023

State of Washington C/o Office of Financial Management

WA

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

Finding: The Employment Security Department did not have adequate internal controls to ensure it submitted accurate financial reports for the Unemployment Insurance program. Questioned Costs: Assistance Listing # 17.225 17.225 COVID-19 Amount $0 Status: Corrective action complete Correct...

Finding: The Employment Security Department did not have adequate internal controls to ensure it submitted accurate financial reports for the Unemployment Insurance program. Questioned Costs: Assistance Listing # 17.225 17.225 COVID-19 Amount $0 Status: Corrective action complete Corrective Action: The Department has implemented procedures to ensure the ETA 9130 and ETA 2112 reports have a secondary review by management prior to submission to the federal grantor. Additionally, documentation of the review and submission will be maintained. Completion Date: February 2024 Agency Contact: Jay Summers External Audit Manager PO Box 9046 Olympia, WA 98507-9046 (360) 529-6718 Joshua.Summers@esd.wa.gov

View Audit 306534

Finding 397183 (2023-004)

Material Weakness 2023

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Allowable Costs / Cost Principles Material Weakness

Finding: The Office of Superintendent of Public Instruction did not have internal controls over and did not comply with requirements to verify single audits were completed for all subrecipients of the Child and Adult Care Food Program. Questioned Costs: Assistance Listing # 10.558 Amount $0 ...

Finding: The Office of Superintendent of Public Instruction did not have internal controls over and did not comply with requirements to verify single audits were completed for all subrecipients of the Child and Adult Care Food Program. Questioned Costs: Assistance Listing # 10.558 Amount $0 Status: Corrective action in progress Corrective Action: The Office will implement internal controls to ensure all subrecipients requiring a single audit are identified and follow up on any program-related findings that require a management decision. Internal controls will include: • Updating procedures on maintaining the subrecipient audit tracking log. • Implementing a training plan for the Child Nutrition Services fiscal team, which includes cross training and completing the State Auditor’s Office subrecipient monitoring training. The Office will follow up with the subrecipient identified in the audit to ensure it obtains its required single audit. Completion Date: Estimated August 2024 Agency Contact: Debbie Libra Fiscal & Claims Supervisor PO Box 47200 Olympia, WA 98504-7200 (564) 233-8620 Debbie.libra@k12.wa.us

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Finding 397174 (2023-005)

Material Weakness 2023

Dakota Plains Legal Services, Inc.

SD

Special Tests & Provisions Subrecipient Monitoring Material Weakness

Legal Services Corporation CFDA #09-742018 Legal Services Corporation - Basic Field - General CFDA #09-742018 Legal Services Corporation - Basic Field - Native American Special Tests & Provisions -Accounting Requirements Material Weakness in Internal Control over Compliance Condition: DPLS has not...

Legal Services Corporation CFDA #09-742018 Legal Services Corporation - Basic Field - General CFDA #09-742018 Legal Services Corporation - Basic Field - Native American Special Tests & Provisions -Accounting Requirements Material Weakness in Internal Control over Compliance Condition: DPLS has not performed an annual risk assessment since 2021, nor tested an emergency disaster prevention and recovery plan. Management Response: DPLS is going to seek outside assistance to have a complete risk assessment and review of our emergency disaster and recovery plans completed. After the assessment is finished, management will review the findings, and make every effort to enact the recommendations made to the program. Responsible Individuals: Lori Stanford, Deputy Director, Tom Mortland, Executive Director. Anticipated Completion Date: December 31, 2024.

View Audit 306525

Finding 397034 (2023-007)

Material Weakness 2023

George Washington Carver Academy

MI

Special Tests & Provisions Procurement, Suspension & Debarment Material Weakness

Corrective Action Plan: The Academy along with its new management company are reviewing, revising, and developing internal controls as necessary in order to comply with compliance requirements relevant to federal programs. Responsible Department: School Leadership and Board and Financial Service ...

Corrective Action Plan: The Academy along with its new management company are reviewing, revising, and developing internal controls as necessary in order to comply with compliance requirements relevant to federal programs. Responsible Department: School Leadership and Board and Financial Service Provider together with which includes the bookkeeping, payroll, grants management, and purchasing functions. Responsible Person: Laura Carpenter, Comptroller, CS Partners Planned Completion Date: Immediate

View Audit 306409

Finding 397027 (2023-006)

Material Weakness 2023

George Washington Carver Academy

MI

Questioned Costs Allowable Costs / Cost Principles Material Weakness

Corrective Action Plan: The Academy along with its new management company are reviewing, revising, and developing internal controls as necessary in order to comply with compliance requirements relevant to federal programs. Responsible Department: School Leadership Responsible Person: Laura Carp...

Corrective Action Plan: The Academy along with its new management company are reviewing, revising, and developing internal controls as necessary in order to comply with compliance requirements relevant to federal programs. Responsible Department: School Leadership Responsible Person: Laura Carpenter, CS Partners Planned Completion Date: Immediate

View Audit 306409 Questioned Costs: $1

Finding 396994 (2023-006)

Material Weakness 2023

City of Idaho Falls, Idaho

ID

Reporting Material Weakness Internal Control / Segregation of Duties § 200.329

Federal Agency Name: U.S. Treasury Department; Assistance Listing Number: 21.027; Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery Funds; Material Weakness in Internal Control Over Compliance – Compliance Requirement – Reporting Finding Summary: The City’s submitted quarterly r...

Federal Agency Name: U.S. Treasury Department; Assistance Listing Number: 21.027; Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery Funds; Material Weakness in Internal Control Over Compliance – Compliance Requirement – Reporting Finding Summary: The City’s submitted quarterly reports as required, but the reports contained errors including incorrect amounts and reporting information on the incorrect line items. Corrective Action Planned: The City concurs with the auditors’ findings. The City is working to coordinate and maintain supporting documentation used to prepare and review quarterly reports prior to submission to ensure the accuracy of the reports submitted. Responsible Individual(s): Mark Hagedorn, Finance Manager/Treasurer; Brooks Slyter, Assistant Finance Manager; Lisa Farris, Grant Administrator Anticipated Completion Date: October 2024

View Audit 306396

Finding 396987 (2023-002)

Material Weakness 2023

Connected Lane County

OR

Material Weakness Internal Control / Segregation of Duties

Finding 2023-002 Corrective Action Planned : Management is already tracking federal expenditures throughout the year. Management will review annual federal expenditures in a timely manner to ensure that we understand whether we need to undergo a single audit. Date by which corrective action will be ...

Finding 2023-002 Corrective Action Planned : Management is already tracking federal expenditures throughout the year. Management will review annual federal expenditures in a timely manner to ensure that we understand whether we need to undergo a single audit. Date by which corrective action will be implemented: July 2024, following the close of year-end. Person(s) Responsible: Heidi Larwick, Executive Director and Mary Bell , Finance Specialist

View Audit 306391

Finding 396661 (2023-001)

Material Weakness 2023

Mount Adams School District No. 209

WA

Subrecipient Monitoring Internal Control / Segregation of Duties Special Tests & Provisions

The District corrected the issue late in the stated audit period. The District will continue to ensure all applicable contracts include not just the term “prevailing wage” but specify “Federal Wage Rate Compliance” to comply with the applicable CFR. The District will also continue to verify payrolls...

The District corrected the issue late in the stated audit period. The District will continue to ensure all applicable contracts include not just the term “prevailing wage” but specify “Federal Wage Rate Compliance” to comply with the applicable CFR. The District will also continue to verify payrolls have been submitted by the contractor before issuing progress payments. Finally, the District will continue to retain documentation of this confirmation for audit. The District disagrees with the statement that, during the audit, the District subsequently collected all weekly certified payrolls. The District uses the Washington State Department of Labor and Industries prevailing wage system as the tool for all contractors to submit their weekly certified payrolls to the District. All weekly certified payrolls were submitted into the L&I system before the audit began and immediately provided to the audit team upon request.

View Audit 306282

Finding 396632 (2023-001)

Material Weakness 2023

Clarkston School District No. J250-185

WA

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

CORRECTIVE ACTION PLAN FOR FINDINGS REPORTED UNDER UNIFORM GUIDANCE Clarkston School District No. J250-185 September 1, 2022 through August 31, 2023 This schedule presents the corrective action the District is planning to take for findings included in this report in accordance with Title 2 U.S. Cod...

CORRECTIVE ACTION PLAN FOR FINDINGS REPORTED UNDER UNIFORM GUIDANCE Clarkston School District No. J250-185 September 1, 2022 through August 31, 2023 This schedule presents the corrective action the District is planning to take for findings included in this report in accordance with Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Finding ref number: 2023-001 Finding caption: The District did not have adequate internal controls for ensuring compliance with federal wage rate requirements.Name, address, and telephone of District contact person: Randy Lybyer, Director of Financial Services 1294 Chestnut St Clarkston, WA 99403-0070 (509) 769-5538 Corrective action the auditee plans to take in response to the finding: The Clarkston School District welcomes the State Auditor’s Office review of federal wage rate requirements in our use of federal funds for the Grantham Elementary HVAC construction project. We agree with the auditor’s findings that our internal control structure was inadequate to ensure compliance with wage rate requirements. The following internal control processes have been implemented effective May 2023. 1. Identify public works projects and other contracts that require compliance with federal wage rate requirements through regular communication with District administrators and maintenance/operations management staff. 2. Complete and enhance the Districts contracts checklists for agreements entered into with contractors, agencies or purchasing cooperatives for the contraction of public works projects. 3. Consult with ESD, OSPI, and SAO to assure proper and complete terms are included in agreement documentation. 4. Collect and review weekly Certified Payroll Reports from contractors and subcontractors upon commencement of applicable projects until completion. 5. Confirmation of receipt and review of Certified Payroll Reports shall be verified prior to vendor payments. A contributing factor to this internal control weakness was turnover in key compliance positions during the time the contracts were being processed and construction was commencing. This finding effectively carried over from the prior audit period September 1, 2021 through August 31, 2022, to the current audit period September 1, 2022 through August 31, 2023. The final invoices for this project were received by the District in March 2023. The finding was originally identified after March 2023 and responded to in May 2023. The opportunity had passed for the District to include prevailing wage clauses in the contract and collect weekly certified payroll from the contractor. The internal control processes listed above were put into place after the project was completed. Anticipated date to complete the corrective action: Immediately

View Audit 306241

Finding 396604 (2023-005)

Material Weakness 2023

Phillips County Hospital Association

MT

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

Management will submit the audited financial statements to the Department of Agriculture.

View Audit 306230

Finding 396603 (2023-004)

Material Weakness 2023

Phillips County Hospital Association

MT

Special Tests & Provisions Subrecipient Monitoring Material Weakness § 200.303

Management will establish and fund a segregated reserve account.

View Audit 306230

Corrective Action Plans

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