Corrective Action Plans

Corrective Action Plan for Finding # 2022 C.1 – Failure to Comply with financial reporting requirements. Community Development Block Grant/State’s Program and Non-Entitlement Grants in Hawaii – ALN# 14.228 Material weakness and noncompliance material to major federal award programs Corrective action Planned: The City has engaged an independent auditor to ensure that all financial reporting requirements are satisfied. Contact person: Mayor Anticipated Completed date: September 30, 2025

Recommendation: The auditors recommended that the accounting department implement controls and procedures to require staff to submit time and attendance records indicating which federal programs they spent time on. Action Taken: Management agreed with this recommendation. Management has developed policies and procedures that will help to ensure timely and accurate tracking of federal expenditures on an annual basis. Our outsourced accounting personnel assumed responsibility for implementation by November 30, 2024.

U.S. Department of Housing and Urban Development – CFDA #14.850 Public and Indian Housing – 2022 Eligibility Material Weakness in Internal Control over Compliance Finding Summary: Testing indicated that there were 2 errors out of the 60 files tested in the tenant’s rent calculation that were not detected by the Authority’s internal controls. In addition, there was no review of the rent calculation by another individual. Responsible Individual: Steven Trujillo, Executive Director Corrective Action Plan: We have implemented a process to ensure eligibility requirements are being followed and that another person reviews the rent calculations, once they are determined. Anticipated Completion Date: January 2023

The College will retain all procurement documentation going forward.

The Department has hired a new audit firm that specializes in the audits of Tribes. Our new audit firm has demonstrated a commitment to allocating the necessary resources to complete our audits in a timely manner.

The Agency agrees with this finding and will adhere to the recommendation. Management has updated and developed its Fiscal Policies and Internal Controls Manual. Accounting procedures are being monitored monthly by the fiscal staff. Management has hired a staff accountant to assist the Senior Accountant with bank statements, recording assets, ensuring all invoices are paid timely, reporting, etc. as needed.

Responsible Party: Director of Opertions and third-party accountant Action to be Taken: Management agrees with the finding, and we have implemented such a policy. Anticipated Completion Date: June 30, 2024

When we initially did this, I spoke with the director at the Federal Forestry Office in Jackson, MS. He told me we could purchase the fire truck because the fire department joined the National Forest. We did not realize that once we had permission we had to advertise in the local paper. The local paper did state in the weekly report that the Board had approved to purchase the truck with no feedback from any individual. We are aware of the correct process now and will adhere to that going forward.

2022-002 Material Weakness in internal controls over compliance with period of performance. Name of Contact Person: Chris Conley, Chief Accountant. Corrective action: To ensure this does not occur again, the City Accountant and Chief Accountant will review all journal entries to make sure that expenses are charges with the appropriate project period and with the definitions of the grant. We will train and have training documents for the City Accountant when the come into this position. Proposed Completion Date: Immediately. Implementation date: Immediately.

As we mentioned in the SA 2021 Corrective Action Plan, WE ARE WORKING WITH Unified Contracts wich is helping us achieve our goal. We will continue with a Unified Contract to ensure that SA 2023 can be released on or before February 2025 and start in 2024 to catch up. We will be working hard to achieve this.

Finding 2022-007 Compliance Requirement: Reporting Type of Finding: Material Weakness Condition: The report for the year ended December 31, 2022 was not filed within the required report submission period. Action Planned in Response to the Finding: Prioritize the financial reporting cycle to ensure timely completion and auditing of financial statements to maintain compliance with reporting requirements. Official Responsible for Ensuring the CAP: Harold Minor Planned Completion Date: December 2024

Finding 2022-006 Compliance Requirement: Special Tests and Provisions-Sliding Fee Discounts Type of Finding: Material Weakness Condition and Context: Supporting documents could not be located for six of the twenty-five patients selected for testing. As such, we were unable to determine eligibility for those patients. Action Planned in Response to the Finding: Implement and monitor procedures to ensure all supporting documents are kept for determining patient eligibility. Official Responsible for Ensuring the CAP: Harold Minor Planned Completion Date: December 2024

Recommendation: We recommend that the County review its procedures for tracking of federal expenditures related to the State and Local Fiscal Recovery Funds and ensure that all expenditures are recorded within the fund at the time they are incurred. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The county will assess the current tracking procedures for State and Local Recovery Funds to identify gaps and weaknesses. They will revise or create standard operating procedures to ensure timely and accurate recording of all expenditures. They will work with department heads to make sure they are properly trained in tracking expenses and reporting them. Name(s) of the contact person(s) responsible for corrective action: Tracy Hartwig Planned completion date for corrective action plan: January 31, 2025

Arizona Immigrant and Refugee Services (AIRS) is planning to prepare monthly financial statements to present to Board Members in a quarterly basis to approve the comparative vs the actual budget and prior years expenses. Board members agree to meet on a quarterly basis and take some training (financially, legally and governance responsibilities. Also, with AIRS management create and implement entity-level. policies, procedures and internal controls and other financial activities.

Keeping in mind the timing of the conclusion of the audit this no longer is problematic. A Payroll consultant has since been under contract to serve as a Liaison with the payroll servicer to remediate errors in calculations of overtime.

The filing system will be tightened to ensure immediate availability of documentation both electronically and paper trail.

Management presents the NCAAA Board with an Allocation Plan prior to the beginning of a fiscal year for review and acceptance to be implemented in the upcoming fiscal year. This will be an annual review and approval procedures.

As previously stated, NCAAA has hired another Finance Director coupled with a Consultant an expert in the Accounting system being utilized to ensure full use. In addition, procedures will be implemented to formalized monthly account reconciliations and year end closed to ensure transactions are properly recorded in the appreciate account and correct period.

NCAAA has hired a full-time Finance Director coupled with a Consultant who is an expert in the Accounting system being utilized to ensure the system is being for its full intent. Inclusive of financial activities. As previously mentioned, procedures will be implemented to formalized monthly account reconciliations and year end closed to ensure transactions are properly recorded in the appreciate account and correct period.

2022-004 – REPORTING Material Weakness/noncompliance Auditee’s Response and Planned Corrective Action See auditee’s response to Finding 2022-001 Person Responsible for Corrective Action: Maria DeMarco, President of DeMarco Management Corporation

2022-003 – ELIGIBILITY Material Weakness/noncompliance Auditee’s Response and Planned Corrective Action The Windsor Housing Authority currently contracts with J.D. A’melia for all Housing Choice Voucher Program services. HCV staff have a broad range of duties covering activities from application, waitlist management, initial briefing for new participants, resident processing through termination of assistance. They will also perform all property activities related to compliance with WHA’s lease for all our properties and they will have extensive contact with landlords and tenants participating in the HCV programs. More specifically, HCV staff responsibilities include but are not limited to:  Lease-ups including new tenant orientation Monthly close-out  Waitlist Management Administrative & clerical functions  Inspection coordination Processing applications  Annual and interim recertification HUD reporting  Landlord services Determining eligibility  Direct deposit set-up EIV  Calculations & payment authorization to landlords & tenants admin fees calculation and payment Person Responsible for Corrective Action: Maria DeMarco, President of DeMarco Management Corporation

Finding 2022-006 Federal Agency Name: U.S. Department of Agriculture Assistance Listing Number: #10.766 Program Name: Community Facilities Loans and Grants Cluster, Community Facilities Loans and Grants Compliance Requirement: Other Finding Summary: The Authority does not have an internal control system designed to provide for a complete and accurate schedule of expenditures of federal awards being audited. We were requested to draft the schedule of expenditures of federal awards. Responsible Individuals: Doran Hammett, Chief Financial Officer Corrective Action Plan: Ongoing

Misapplication of the Sliding Fee Scale The department responsible for gathering and recording patient income data, and applying sliding fee discounts, experienced high attrition rates due to the role being entry-level. Recognizing these challenges, the Organization is in the process of revising the training plan for this department and establishing a quality assurance process for monitoring. Additionally, the Organization will review and revise the sliding fee policy to enhance clarity of the process for application of discounts and proof of income documentation. Responsible Parties: Mark Groeller, Compliance Director, Lisa DeMallie, Associate Vice President of Patient Experience, and Melissa Darko, Revenue Cycle Director Estimated Completion Date: December 31, 2024

FINDING 2022-005 Finding Subject: CDBG ‐ Entitlement Grants Cluster ‐ Period of Performance Summary of Finding: The county did not have properly designed internal controls in order to prevent or detect errors in the general ledger for activities related to adjustments to Community Development Block Grant funds during the transition and implementation of the Oracle accounting system. Contact Person Responsible for Corrective Action: Dan Ciecierski, Comptroller Contact Phone Number and Email Address: 219-755-3137 | ciecidx@lakecountyin.org Views of Responsible Officials: We concur with the finding. Explanation and Reasons for Disagreement: N/A Description of Corrective Action Plan: Lake County has begun execution of a comprehensive strategy in order to address the lack of internal controls around its financial transactions and reporting in a number of ways. The following will address control issues identified in these areas: - Financial Transactions and Reporting - Employee Benefit Accrual (EBA) Fund - Cash and Investments - Receipts - Journal Entries - Financial Statement & Reporting First, a more qualified consulting firm has been hired to assist on two important fronts related to the new accounting system: 1. The first is the reimplementation of the Oracle accounting software which is inclusive of correcting data and poor configurations from the prior consultant, and deploying additional appropriate functionality to allow the County to optimize Oracle to suit the accounting needs from a process standpoint as well as an internal control perspective. Oracle in and of itself allows the county to implement strategic preventative internal controls via role-based access features. Said differently, Oracle has a more robust and granular ability to automatically create separation of INDIANA STATE BOARD OF ACCOUNTS 41 duties among employees and departments simply by restricting the ability to perform actions which should be naturally segregated to mitigate risk of error. 2. Secondly, the managed services portion of the consulting contract will aid the County in running the business activities related to both the Oracle Human Capital Management (HCM) module and the Enterprise Resource Planning (ERP) module (Purchasing, Accounts Receivable, Accounts Payable, and General Accounting). Another initiative being executed to address the lack of internal controls is to attract, and hire qualified professionals who have years of real world, practical experience in the field for which a job relates to. During the original implementation of the Oracle system there was no one who fully understood, nor had a background in the professional field of accounting in the Auditor’s Office. The County has hired a Comptroller who passed the CPA, and has spent their entire career in the field of accounting. This individual has worked in the corporate utility and banking industries and has experience in GAAP reporting, regulatory reporting, internal controls, and overall general accounting. Additionally, the Comptroller has been involved with internal and external audit compliance as well as the installation, user acceptance testing, and transition of new accounting software. In order to mitigate the risk of error for any adjusting entries made which are recommended by consultants, the Comptroller of Finance must review and approve these entries. Anticipated Completion Date: 1. This process has already been put into place and is being executed.

FINDING 2022-004 Finding Subject: CDBG – Entitlement Grants Cluster—Reporting Summary of Finding: Condition and Context: The County did not have internal control procedures over the Quarterly Reports (PR29), IDIS Section 3 Performance Report, and NSP Quarterly Reports. One individual prepared or generated the report without a review or oversight process. Additionally, the County’s internal controls were not consistently documented over the draw down requests for the CDBG grant during the audit period. The draw down requests were entered into IDIS, which then becomes the basis for several of the reports. The control presented by the County was that one individual prepared and entered the request, which would then be printed, and another individual would review and sign the printed request to document the review. Of the thirteen reimbursement requests tested, control documentation for eight of the requests were printed and signed during current period, after the documentation was requested. The creation of documentation of the control procedure did not support that internal controls were effective during the audit period. Recommendation: We recommended that the County's management design and implement a proper system of internal controls, and retain documentation of its system of internal controls, to ensure compliance with reporting requirements. Contact Person Responsible for Corrective Action: Timothy A. Brown Contact Phone Number and Email Address: 219-755-3225 and brownta@lakecountyin.org Views of Responsible Officials: LCCEDD concurs with the audit finding. Concurrence: The Fiscal Officer from the Audit Period was new to the position and her training was focused on the changes to the financial systems at the county over the DRGR quarterly reporting of NSP actions. Further, Finding 2022-003 also caused some of the reporting issues with CDBG of having two CDBG funds and posting errors to these funds. The current LCCEDD Fiscal Officer found the problems during the audit and corrective actions were done retroactively to address this part of the finding with the drawdown requests. The CDBG drawdowns were submitted into IDIS by the Fiscal Officer who printed out the drawdown request. These printouts were then given to the Executive Director or the Deputy Director who then went into IDIS and approved the drawdown request, then print out the IDIS drawdown approval and return the request and the signed approval back to the Fiscal Officer. LAKE COUNTY COMMUNITY ECONOMIC DEVELOPMENT DEPARTMENT 2293 N. Main Street - Crown Point, In 46307 Tel. (219) 755-3225 www.lakecountyin.org INDIANA STATE BOARD OF ACCOUNTS 38 Description of Corrective Action Plan: LCCEDD staff have already adopted changes in internal controls to correct the CDBG reporting deficiencies as described in Finding 2022-003. Further, management will oversee compliance with current policies and the new quarterly reconciliations. LCCEDD policies will be updated to make the following changes: General Management and Oversight: On an on-going basis, the Director will meet with Department staff to determine if training or technical assistance is needed to complete HUD reporting requirements in a timely and accurate manner. NSP Quarterly Reports: To be followed until the HUD field office indicates QPR reports are no longer needed due to grant closeout: 1. Before the close of each month, the Fiscal Officer will create receipts and draws as needed in HUD’s DRGR system to reflect funds receipted or expended by the County. 2. At the close of each quarter, the Fiscal Officer will prepare and submit the quarterly report in DRGR for the NSP1 and NSP3 grant allocation. To prepare the report, the Fiscal Officer will reconcile all expenses and receipts posted in the County’s general ledger system for the NSP programs with the receipts and drawdown requests recorded in in HUD’s DRGR reporting system. 3. Before submitting the NSP QPR Report in the DRGR system, the Deputy Director will review and approve the prepared reconciliation and QPR Report. Any discrepancies between the two systems will be reported to the Auditor and the Department Director to determine corrective actions. 4. Within 30 days of the close of each calendar quarter, the Fiscal Officer will submit the NSP QPR Report via DRGR. The Fiscal Officer will maintain a copy of the NSP QPR and the corresponding reconciliation in their program files. Cash on Hand Reports: 1. At the close of each quarter, the Fiscal Officer will prepare and submit the Cash on Hand Report within thirty days of the close of the quarter. The Fiscal Officer will reconcile all expenses and receipts posted in the County’s general ledger system with the receipts (report PR09) and drawdown requests (report PR07) in HUD’s IDIS Online reporting system. 2. Before submitting the Cash on Hand Report in the IDIS Online system, the Deputy Director will review and approve the prepared reconciliation and Cash on Hand Report. Any discrepancies between the two systems will be reported to the Auditor and the Department Director to determine corrective actions. 3. Within 30 days of the close of each calendar quarter, the Fiscal Officer will submit the Cash on Hand Report via IDIS Online. The Fiscal Officer will maintain a copy of the Cash on Hand report and the corresponding reconciliation in their program files. INDIANA STATE BOARD OF ACCOUNTS 39 Section 3 Reporting: 1. As part of the application review, the Deputy Director will determine the applicability of the Section 3 requirements for each proposed project. 2. For projects where Section 3 is applicable, the Deputy Director will ensure that staff administering the project are familiar with the Section 3 requirements and understand the forms and reporting required to properly report Section 3, including the determination of total labor hours worked, labors hours worked by Section 3 and Targeted Section 3 workers, and corresponding certifications. 3. The County will collect Section 3 reports from subrecipients administering projects throughout the period of performance. If the project meets Section 3 benchmarks, the County will consider the activity to be in full compliance with Section 3. If the project does not meet one of the Section 3 benchmarks, the County will require reporting on the qualitative efforts that the subrecipient made to try to reach the benchmarks. 4. Section 3 information collected for each project will be reported in IDIS Online. The Section 3 information must be reported annually before the submission of the annual report (CAPER) to HUD. Anticipated Completion Date: Part of the corrections have already been put into place and the Policy and Procedure Manual will be amended in April of 2025 after the Lake County Redevelopment Commission adopts appropriate changes.