Corrective Action Plans

Corrective action Plan: Due to the termination of activities as mentioned in Note 8 of the financial statements, the Organization is unable to develop and implement a corrective action plan.

Department of Education, passed through the State of Montana Office of Public Instruction, Federal Financial Assistance Listing 84.010, federal award numbers S010A240026 and S010240026, grant period 7/1/2024 – 9/30/2026 Title I Grants to Local Education Agencies Special Tests and Provisions Finding Summary: During the auditor’s federal program testing of Title I, it was noted that several students were removed from the adjusted cohort for unallowable reasons. Corrective Action Plan: The District staff will follow the guidance in ESEA sections 1111(h)(1)(C)(iii)(II) and 8101(23), (25) (20 USC 6311(h)(1)(C)(iii)(II) and 7801(23), (25)), to ensure graduation rate data is reported correctly going forward. Responsible Individual: Laurie Kvamme, Chief Financial Officer Anticipated Completion Date: June 30, 2026

Finding Correction Action Plan Details 2025-001 a. Name of Contact Person Responsible for Corrective Action: Michelle Cage – Chief Financial Officer b. Corrective Action Planned: Management will continue to implement policies or procedures to establish an internal control system that will ensure strong financial accountability, proper safeguarding of assets, and compliance with federal grant requirements. c. Anticipated Completion Date: Immediately.

a. material weakness - Condition: During our testing of expenditures charged to the grant, we noted that a paymnet for contracted services was charged to payroll costs. The error was subsequently corrected by the district. Expendituresshould be charged to appropriate account codes. b. Plan of action - The responsible officials recognize the importance of ensuring expenditures are charged to the appropriate account codes. There was a misunderstanding on the form that was filled out for the oregon department of education. This error was corrected with a journal entry. Additionally, the account codes used for federal awards will be reviewed for accuracy on an annual basis. C. Timing: Correcting journal entry was completed on 6/30/2025

Recommendation: CLA recommends the District review its grant disbursement process to ensure that there is adequate segregation of duties in regards to initiating, authorizing, reviewing for grant allowability and approving purchases, along with adding controls to ensure that the item purchased was received by the District. CLA also also recommends the District printout the eligibility reports from Wisegrants and sign and date them to indicate review and approval after meeting with CESA 10 each year. Explanation of disagreement with audit finding: There is no disagreement with this finding. Action planned/taken in response to finding: The District will note the date of the budget meeting with CESA 10. When items are purchased for Title I, approval will be made by either the Elementary Principal or Superintendent before purchases are made. Name(s) of the contact person(s) responsible for corrective action: Brooke Rosemeyer, Adrian Foster, Brandon Baldry Planned completion date for corrective action plan: September 1, 2026.

U.S. Department of Health and Human Services Pass-through Entity: North Carolina Department of Health and Human Services Program Name: Medical Assistance Federal Assistance Listing Number: 93.778 U.S. Department of Health and Human Services Pass-through Entity: North Carolina Department of Health and Human Services Program Name: Children's Health Insurance Program Federal Assistance Listing Number: 93.767 Material Weakness and Nonmaterial Noncompliance - Eligibility Finding 2025-002 - Repeat Finding Criteria or Specific Requirement: Per Section 200.303 of the Uniform Grant Guidance, a non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. The County should have adequate documentation for each participant that supports each eligibility determination, and the information entered into NCFAST. We noted several errors related to the following compliance criteria: a) Self-attestation wages should be compared to information in NC FAST. b) All countable resources should be confirmed and recalculated and ensure they are computed accurately in NC FAST. c) The caseworker should prepare and submit a DMA-5097 form in the case of incompatible income verification and self-attestation income as described in the Eligibility Review Document. d) Citizenship should be documented within NCFAST. e) Household information should be entered correctly into NCFAST. Condition: The following are the results of nonmaterial noncompliance noted for each criteria listed above out of the 124 program participants selected for testing: a) There were six instances where the participants self-attest wages did not agree to the wages entered into NC FAST. b) There was one instance where the countable resources were inaccurate within NC FAST. c) There were five instances where the income was incompatible between the income verification and self-attestation income but no DMA-5097 was sent. d) There was one instance where the participant's citizenship was not documented in NCFAST. e) There was one instance where the participant's household size was entered incorrectly into NCFAST. Lastly, there were 6 instances out of 60 program participants tested for control testing where the County did not remediate the errors identified within their internal review timely. Context: There were 8 out of 124 unique participants tested with the errors noted above. Questioned Costs: We noted no federal questioned costs for the County as the State of North Carolina makes all benefit payments to participants directly. Due to split eligibility determinations between the Counties and the State of North Carolina for Medicaid, we found $25,105 in benefit payments made by the State of North Carolina to ineligible participants based on an improper eligibility determinations at the County related to three individuals in item "a" above. Effect: By not having the required documentation in the files or information being incorrectly documented, eligibility cannot be readily substantiated and there is a risk the County could provide funding to individuals who are not eligible. Cause: County oversight when performing reviews over applications. Additionally, the County does not have a formal process in place to ensure issues identified during the review process are appropriately corrected on a consistent and timely basis. Recommendation: Although these issues will occur from time to time considering the volume of case files, the County should review their processes to ensure proper supporting documentation of eligibility is maintained within each case file. Additionally, Mecklenburg County should consider implementing a formal policy for the requirements of having documentation corrected within a specific timeframe once identified and monitored throughout the year for adherence to the policy. Views of Responsible Officials: Management agrees with the finding and is implementing procedures to correct this which is further discussed in the Corrective Action Plan. Corrective Action Plan: Performance Improvement Strategy: The County has identified specific opportunities to strengthen accuracy and consistency in eligibility case documentation. While overall performance has improved, with total errors reduced from 14 the prior audit period to 8 in the current period, continued focus is necessary to further reduce errors and sustain compliance across case files. The Economic Services Division Strategies are as follows: • Social Services Supervisors will conduct targeted reviews of identified error trends, emphasizing policy application, documentation completeness, and process standardization to ensure consistent eligibility determinations across the program. • The Economic Services Division's Staff Development Unit will continue to quality sample cases to promote accuracy and accountability. • Social Service Supervisors, in coordination with Medicaid Social Services Managers will coach staff based on audit findings, monitor trends and ensure required corrections are completed within 5 business days of notification. • Failure to complete corrections within the approved timeframe will result in corrective action to both the Social Services Supervisor and the assigned Eligibility Specialist in accordance with departmental performance management protocols. • Supervisory staff will ensure all updates to the Quality Sampling Tracking Log are finalized no later than the 20th calendar day of the subsequent month to support timely monitoring, trend analysis, and corrective action. These actions are designed to strengthen internal controls, support staff performance and maintain compliance with applicable state and federal requirements. Responsible lndividual(s): Kim Konior, Lynn Martin (Medicaid Program Managers), Staphon Snelling (Training and Development Manager), Danisa Concepion, Donnie Munson (Quality and Training Supervisors), and Social Services Medicaid Supervisors. Anticipated Completion Date: Ongoing Training: The Economic Services Division's Staff Development Unit will review the Single Audit findings and develop targeted training for staff responsible for determining Medicaid eligibility, as well as their supervisors and managers. This training will specifically address the errors identified in the audit and will be delivered by the end of March 2026. In addition, Staff Development will provide quarterly training to Medicaid eligibility staff, supervisors, and managers based on error trends identified through quality sampling conducted by the unit. To ensure effectiveness, a structured training approach will be used: • A pre-test will assess staffs current understanding of relevant policies. • The County will deliver targeted training materials tailored to address identified gaps. • A post-test will be developed, with a minimum passing score of 90%. This approach will allow the County to: • Measure knowledge gained through the training • Track training completion, identify staff who have or have not completed the training • Ensure consistent understanding and application of policy across the team Staff who do not achieve the required score will receive additional refresher training to reinforce key concepts and ensure compliance. Responsible lndividual(s): Staphon Snelling (Training and Development Manager), Danisa Concepion, and Donnie Munson (Quality and Training Supervisors), and Sr. Quality and Training Specialists (Medicaid). Anticipated Completion Date: March 31, 2026

Condition: The Village did not have adequate controls in place to exercise its oversight responsibility of adherence to wage rate requirements that were reviewed by a contractor for the program. The Village also did not have controls in place to exercise oversight over the same contractor's review of general and subcontractors for suspension and debarment. Planned Corrective Action: The Village has implemented updated procedures as recommended by the auditors. Contact person responsible for corrective action: Penny Ray Anticipated Completion Date: 12/31/2025

Condition: Controls were not in place to ensure that the schedule of expenditures of federal awards (SEFA) was complete and accurate. Planned Corrective Action: The Village has hired an outside contractor to assist with review of audit documents. Contact person responsible for corrective action: Penny Ray Anticipated Completion Date: 12/31/2025

Condition: The Village did not have written policies for cash management or procurement that adhered to the requirements of the Code of Federal Regulations. Planned Corrective Action: The Village is currently reviewing existing policies to determine the best course of action and updating them for compliance. Some updates may require voter approval as certain provisions are in the Village Charter. Contact person responsible for corrective action: Penny Ray Anticipated Completion Date: 12/31/2026

Finding Summary: The County did not have adequate internal controls to ensure reporting requirements were met. The critical information reported did not reconcile to supporting documentation related to reimbursement amounts, for one report out of three tested reports. Corrective Action Plan: Eureka County will submit quarterly reports which reflect the actual reimbursement received during that quarter. Responsible Individual: Jayme Halpin, Assistant Public Works Director Anticipated Completion Date: Public Works will correct the quarterly reports with the State Department of Conservation and Natural Resources to ensure the reports reflect actual revenue received during the quarter being reported. This will be completed by January 29, 2026.

Hope Network acknowledges receipt of the Schedule of Findings and Questioned Costs included in the Single Audit Report dated January 21, 2026, identifying Finding #2025-001: Major Federal Award Finding- Reporting. Hope Network agrees with this finding and the recommended actions to be taken. Corrective Action Plan: Specific Corrective Action: Completion Date File all overdue semiannual performance reports. Completed Submit overdue required written request due upon final funds draw and project completion. Completed Finance department will review all grant agreements to ensure all required reporting, not just financial reports, are tracked and filed in timely within the terms of the grant agreement. 03/31/2026 Finance in conjunction with Hope Network Foundation will review existing grant procedures to develop a uniform process to be utilized across all Hope Network Affiliates. 06/30/2026 We are committed to resolving this issue.

Finding 2025-009 U.S. Department of Housing and Urban Development (HUD) AL No. 14.241 Housing Opportunity for Persons with AIDS Material Weakness in Internal Controls and Noncompliance over Reporting Repeat Finding: Yes; 2024-013 Auditee’s Corrective Action Plan: MOHS will strengthen internal controls over federal reporting to ensure accuracy, completeness, and compliance with HUD and Uniform Guidance requirements. Specifically, MOHS will implement a documented reconciliation process requiring all HOPWA expenditures reported in the Federal Financial Report (FFR) to be reconciled to the general ledger prior to regular submission, with supervisory review and approval documented. MOHS will establish a formal reporting calendar and standardized checklist to ensure timely preparation, review, and submission of all required HUD reports, including the FFR, Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting (FSRS), and the Consolidated Annual Performance and Evaluation Report (CAPER). • Written procedures will be developed to clearly define staff roles and responsibilities for federal reporting and FFATA compliance, including identification of reportable first-tier subawards and documentation of FSRS submissions. MOHS will also provide targeted training to program and fiscal staff responsible for federal reporting and will conduct periodic internal monitoring to verify compliance with 2 CFR §200.303 and 2 CFR Part 170. MOHS will require grant staff to attend GMO monthly training sessions and review GMO provided training materials pertaining to grant management, grant reporting, and subrecipient monitoring and will require grant staff to review and comply with Administrative Manual policies 413-00 through 413-70 pertaining to all aspects of City-wide grant management. • Per the GMO’s guidance, MOHS will add award reporting tasks to all grant awards in Workday, the City’s financial system of record, to ensure timely completion of all grant reporting as well as upload regular reports into Workday. Contact Person: Sade Creighton-Wade, Chief of Fiscal Services Completion Date: June 30, 2026

MW 2025-001 SFA Cluster: R2T4 Corrective Action Plan Contact Person: Jeff Boyle, Director of Financial Corrective Action Plan: 1. Have at least two staff members enroll and complete the R2T4 training module conducted by NASFAA. Tonja Suttles and Melissa Satterwhite completed the course and passed the credential exam. Suzanne Bonner sat in on a few of the sessions. 2. Make changes to the R2T4 spreadsheet. a. Maintain a separate tab for each calculation group to make tracking and internal reviews easier. Process has been completed and started being used during the 2025 fall semester. b. Add additional columns to the spreadsheet that will provide the necessary data to perform the R2T4 calculation within Colleague and act as a check and balance as the calculation is being performed. There are several columns with calculated data or data coming from a source outside of Colleague. These data values can then be compared to the values Colleague calculates and the two should match. Columns have been added and began being used with the 2025 fall semester. 3. It will be established that one staff member will do the R2T4 calculation and a second staff member will do a spot check of a spot check to ensure the calculation was done properly using the correct data. The number of students checked will depend on the number of students within the calculation groups. The number of students in a group can range from 2 to several hundred. This process was put into practice starting with the 09/17/25 calculation group. Jeff Boyle, Director of Financial Aid, performed all the R2T4 calculations for the 2025 fall term and Tonja Suttles, Assistant Director of Financial Aid, performed 100% review of all the calculations. This will change once we are assured this process is working the way we expect it. 4. The external spreadsheets and charts used for the R2T4 calculation contain a tremendous amount of data elements and are created two years in advance of being used. A process will be established where various staff members within the office will review the data prior to our using it for the R2T4 calculation. This has been implemented as of the 2025 fall semester. All the 2025-2026 terms have been reviewed. A secondary review will be done on each term just prior to the data being used for that term’s R2T4 calculations. The data will be reviewed again at any point we determine the data may not be correct.

FINDING 2025-005 Finding Subject: Title I Grants to Local Educational Agencies – Special Tests and Provisions – Assessment System Security Contact Person Responsible for Corrective Action: Superintendent and Title I Program Director Mr. Todd Tanksley Contact Phone Number and Email Address: 812-849-4481 – tanksleyto@mitchell.k12.in.us Views of Responsible O􀆯icial: We concur with the finding. Description of Corrective Action Plan The School Corporation has implemented enhanced internal control procedures to ensure compliance with Assessment System Security requirements and applicable state and federal regulations. E􀆯ective immediately, the School Corporation will: 1. Require all employees who administer, handle, or have access to secure test materials to complete annual assessment security training in accordance with the Indiana Assessment Policy Manual. 2. Require all such employees to sign the Indiana Testing Security and Integrity Agreement annually by an established deadline. INDIANA STATE BOARD OF ACCOUNTS 34 3. Establish a standardized process to collect, review, and retain signed testing security agreements at the building level. 4. Maintain a centralized tracking log of all employees required to complete training and sign agreements. 5. Conduct an annual verification review to ensure that all required documentation is complete prior to the testing window. 6. Retain all assessment security training documentation and signed agreements in accordance with federal record retention requirements under 2 CFR 200.334. Planned Evidence of Correction The School Corporation will maintain the following documentation as evidence of corrective action: ● Annual assessment security training agendas and attendance record ● Signed Indiana Testing Security and Integrity Agreements for all applicable sta􀆯 ● Centralized tracking logs indicating completion of training and agreement signatures ● Building-level verification checklists signed and dated by administrators ● Written internal procedures related to assessment system security compliance Anticipated Completion Date Implemented and ongoing beginning with the FY2026 assessment cycle.

Finding 2025-004 Title I Grants to Local Educational Agencies – Eligibility Contact Person Responsible for Corrective Action: Superintendent and Title I Program Director Mr. Todd Tanksley Contact Phone Number and Email Address: 812-849-4481 – tanksleyto@mitchell.k12.in.us Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan The School Corporation has established and implemented written internal control procedures to ensure that enrollment and poverty data reported in the October Real Time Reports are reviewed for accuracy and compared to the Title I application prior to submission. Beginning with the current grant cycle, the School Corporation will: 1. Obtain and retain copies of the October Real Time Report data used for each Title I application year. 2. Perform and document a detailed review of enrollment and poverty counts by school utilizing a worksheet that itemizes total enrollment at each school within the district, compares the low-income count according to the Real Time report, the utilized lunch software, and the counts indicated on the Title I application, and indicates a match (or variance in the event of data discrepancy) of the data among those three data sources. INDIANA STATE BOARD OF ACCOUNTS 32 3. Compare the poverty and enrollment data from the October Real Time Reports to the Eligible School Summary within the Title I application. 4. Verify poverty data using source documentation from the school lunch software system. 5. Investigate and resolve any discrepancies identified prior to submission. 6. Maintain documentation supporting the review, comparison, and verification process in accordance with federal record retention requirements under 2 CFR 200.334. Planned Evidence of Correction The School Corporation will maintain the following documentation as evidence of corrective action: ● October Real Time Reports ● Poverty and enrollment comparison worksheets ● School lunch software reports ● Signed and dated review checklists ● Copies of submitted Title I application Anticipated Completion Date Implemented and ongoing beginning with the 2026 Title I application.

Finding Reference: 2025-001 Description of Finding: HUD regulations require certifications to be completed and entered timely to ensure accurate calculation of Housing Assistance Payments (HAP), Total Tenant Payment (TTP) and utility reimbursements. Per 24 CFR section 982.516, the Authority must reexamine family income and composition at least once every two years and adjust the tenant rent and housing assistance payment as necessary using the documentation from third party verification. Of the 60 Moving to Work files tested, the following items were noted: • 40 instances of certifications not completed timely • 6 instances where the file did not contain income support • 3 instances where housing quality standards inspections were not completed within the last 2 years • 1 instance in which a rent comparison was not completed for a new move in Statement of Concurrence or Nonconcurrence: Louisville Metro Housing Authority agrees with Cherry Bekaert in reference to audit finding 2025-001. Corrective Action: LMHA continues to work through issues around the proper and timely processing of program certifications to support accurate Housing Assistance Payments, Total Tenant Payments and utility reimbursements. Currently, recertifications are processed on a biennial basis schedule, through a three-tiered system outlined in our updated MTW plan. This will address timeliness of recertification while also ensuring compliance and review of supporting documentation. Please note the following rules tied to LMHA’s three-tiered recertification system: 1) When the family is zero income, they will go to an annual recertification. 2) When family is working, (enrolling in KTAP (Kentucky Transitional Assistance Program), receiving Child Support, and other similar sources of income) they will go to a biennial recertification. 3) When a family has fixed income, (receiving Social Security, Supplemental Security Income, and/or Pension payments), they will go to a triennial recertification. The HCV Team is also working with Yardi (ERP system) to maximize the reporting and monitoring of the recertification schedule. The manager initiates the tracking for needed processing and possible termination of participants. With the three-tiered system, staff will be able to review all tenant information closely during recertifications to ensure proper housing assistance payments. Additionally, to improve sufficient controls and internal monitoring, the HCV Team is partnering with the Compliance Team to review tenant files for errors and improper supporting documentation.

Corrective Action Plan Finding Number: 2025-001 – Enrollment Reporting Controls – Student Financial Aid Special Test Finding: There is no control in place by the College to review information submitted to NSLDS for student enrollment status changes. Corrective Actions Planned Given the size of the Financial Aid Office, the College will implement compensating internal controls to ensure accurate and timely enrollment reporting while maintaining operational efficiency. Effective immediately, the College will implement the following controls: 1. Continued Use of the National Student Clearinghouse (NSC) The College will continue to rely on the National Student Clearinghouse as its third-party servicer for enrollment status reporting to NSLDS. 2. Independent Post-Submission Review On a monthly basis, the Office of Financial Aid will review NSC enrollment reporting confirmation files to verify that enrollment status changes were submitted to NSLDS accurately and within the required 60-day timeframe. This review will be performed by an individual other than the primary preparer, where feasible, or through supervisory review when staffing is limited. 3. Documentation and Retention Evidence of review, including reviewer initials and date, will be retained. A simple enrollment reporting review log will be maintained to document compliance. 4. Ongoing Oversight The Director of Financial Aid will conduct periodic spot checks to confirm controls are operating as intended. Responsible Official: De Rodrick Jonkins, Director of Financial Aid Anticipated Completion Date: February 1, 2026 Additional Context The Director of Financial Aid assumed the role effective April 1, 2025, after prior corrective actions had been initiated. While formal independent review controls were not documented during the audit period, there were no identified instances of late enrollment reporting or inaccurate enrollment status submissions to NSLDS. The corrective actions above are intended to formalize controls and ensure sustained compliance with federal requirements.

Finding 2025-002: Reporting (Material Weakness, repeat finding) U.S. Treasury Department – COVID-19 Coronavirus State and Local Fiscal Recovery Funds (ALN 21.027) Statement of Condition: During testing one of the College’s quarterly ARPA expenditure reports was submitted to Bucks County after the deadline per the grant agreements. The report tested was submitted 20 days late. Criteria: The College is a subrecipient of ARPA funding from Bucks County. The grant agreements state the College must submit quarterly expenditure reports to the County 11 days after the end of the quarter (calendar year). Cause: The College did not have adequate controls in place to ensure the timely filing of expenditure reports. Effect: Failure to comply with ARPA reporting requirements could jeopardize future federal funding. Recommendation: We recommend that the College reconcile, review, and submit reports in a timely manner based on grant agreements. Questioned Costs: This finding does not result in questioned costs. View of responsible officials and planned corrective actions: Management agrees with the finding. The College has strengthened the process to ensure the timely and accurate reconciliation, review, and submission of expenditure reports consistent with the requirements of all grant agreements. The College’s Grant Office has created a Grant Project Management Platform to track compliance requirements for all grants including timely invoicing and reporting. This platform provides a dashboard and reminder functions for deadline monitoring. The Grants Manager participates in weekly meetings with the Executive Director, Research, Assessment, Data Analytics, & Reporting, to review deadlines and facilitate the timely and accurate completion of all tasks related to grant compliance. Name(s) of Contact Person(s) Responsible for Corrective Action: Elana Felberg, Grants Manager Anticipated Completion Date: January 31, 2026

Auditor Description of Condition and Effect: During our audit procedures over the District’s payroll process, we noted that an employee’s wages were allocated to the food service function based on a straight percentage instead actual work performed. As a result of this condition, the District does not have proper controls in place over its procedures for allocation of wages. Auditor Recommendation: The District should utilize timecards to support the allocation of wages to federal functions. Corrective Action: The District will. Responsible Person: Jamie Johncock, Business Manager Anticipated Completion Date: June 30, 2025

Condition: The Commission did not submit the required financial and performance reports promptly. Planned Corrective Action: The Capital Team Project Manager continues to reconcile HUD’s EPIC and ELOCC systems with Yardi monthly to ensure timely filing of capital projects' closeouts. This tracking critical spreadsheet, created by the Lead Performance Officer, will trigger key reporting dates for the DHC Capital Fund Program to remain in compliance with HUD reporting deadlines. At a minimum, monthly, this critical spreadsheet is distributed to the Supervisor of Capital and the Lead Performance Officer to ensure compliance. However, this was on the radar and continues the process of cleaning older items for corporate hygiene. As of December 2025, this was closed out and approved in EPIC by HUD. Contact person responsible for corrective action: Michael Edwards, Capital Asset & Skilled Trades Supervisor Anticipated Completion Date: 12/31/2025

FINDING 2025-003 Contact Person Responsible for Corrective Action: Diana Smith Contact Phone Number: 219-663-3371 Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: Along with continuing current control processes, the Registrar will include the Director of Grants and Assessments in the email to the Data Specialist regarding the withdrawal. A monthly report will be generated by the Data Specialist and given to the Director of Grants and Assessments to verify the withdrawals have been completed appropriately. Anticipated Completion Date: February 2026

Condition & Criteria: The College did not consistently report Direct Loan and Pell Grant origination/disbursement records to the COD system within the required 15-day window (or November 30, 2024 deadline), due to EDConnect software and system issues. Auditor's Recommendation: Implement additional processes to ensure timely reporting and prompt resolution of software issues. Corrective Action: The Financial Aid department is implementing automated alerts and conducting weekly compliance checks to ensure timely and accurate processing. The team is coordinating closely with TVCC IT to prevent future delays, and software or system performance issues affecting financial aid operations will be escalated as a priority. In addition, staff will receive training on federal reporting timelines and established escalation protocols to strengthen long-term compliance. Responsible person: Director of Financial Aid, with oversight from Vice President of Student Services. Anticipated Completion Date: Begin implementation immediately and accomplish full implementation by Spring 2026; ongoing monitoring.

Finding 2025-002 - replacement reserves not deposited timely a. Issue: During the year ended June 30, 2025, the Projects were delinquent in making the required monthly deposits to the replacement reserve. BC HUD I required deposits for the period July 2024 through February 2025 in the amount of $60,928 were funded in February 2025. BC HUD II required monthly deposits for the period July through September 2024 in the amount of $7,278 were funded in February 2025, for the period October through December 2024 in the amount of $7,416 were funded in March 2025, and for the period January through April 2025 in the amount of $9,888 were funded in April 2025. BC HUD Ill required monthly deposits for the period July 2024 through May 2025 in the amount of $26,015 were funded In May 2025. b. Recommendation: Management should establish or undertake a review of internal controls over monitoring of the replacement reserve requirements to ensure deposits are made as required. c. Action taken: A tracking spreadsheet is now being used which lists the monthly amounts required to be transferred to the reserves and has a column for staff to input the date that the transfers were made. This spreadsheet is now reviewed on a weekly basis by both the Senior Cash Management Accountant and the Assistant Controller as part of the weekly check run to ensure that the monthly transfers to the reserves are made early in the month prior to paying other liabilities.

1. Finding 2025-001 - tenant rent payments not deposited timely a. Issue: During the year ended June 30, 2025, Bay Cove Human Services, Inc., an affiliate and sponsor agency for Juliette Corporation, collected rent and other client fees related to its clients who are also tenants in the Projects. For a portion of the year ended June 30, 2025, Bay Cove Human Services, Inc. did not timely remit the tenant rent portion of these payments to the Projects. Delinquent rent payments for the period July 2024 through February 2025 amounted to $104,547 and were deposited in February and March 2025. Additionally, June 2025's rents were outstanding and owed to the Projects as of June 30, 2025 in the amount of$19,785 and were deposited in July 2025. b. Recommendation: Management should establish or undertake a review of internal controls over monitoring of the tenant rent deposits to ensure deposits are timely made into the Project accounts. a. Action taken: The tenant rent transfers are now prepared on a monthly basis, with the Assistant Controller reviewing them. In addition, the accounting team is now performing a monthly reconciliation of the related balance sheet accounts which show the amounts due to/from the entities for the tenant rents in order to identify any problems with the timeliness of the transfers. The Assistant Controller is reviewing these reconciliations on a monthly basis as well.

A. Finding Finding 2025-001 – Moving to Work Resident Files – Eligibility – Rent Calculations & HAP Disbursements Noncompliance & Material Weakness – ALN #14.881 B. Condition and Cause The auditor reviewed fifteen (15) Housing Choice Voucher (HCV) project-based voucher (PBV) participant files and twenty (20) HCV tenant-based voucher (TBV) participant files for a total of thirty-five (35) participant files. It was noted that fourteen (14) TBV files were non-compliant. C. Background Information The HCV Department has had numerous staff turnover in recent years. Due to organizational restructuring, Shannon Walters was moved from HCV Manager to Multi-Family Housing Director in March 2024 and Todd James was promoted to Interim HCV Manager in March 2024. Todd was moved to the HCV Operations Administrator position in February 2025, and Charlotte Bowen was hired as HCV Manager in March 2025. Mary Cameron was hired as HCV Caseworker (TBV) in December 2023 and received extensive one-on-one training. Due to performance concerns, she was given a Performance Improvement Plan. Upon completion, her performance was found to be unsatisfactory. Mary was transferred to Property Manager at the LaFayette Housing Authority site in October 2025. D. Controls to Correct the Deficiency To correct the finding noted above, the Auburn Housing Authority (AHA) will proceed as follows: a. The HCV Manager will perform a comprehensive audit of all TBV files and correct appliable deficiencies. b. Implement other internal control measures to eliminate future audit findings. E. Person Responsible: Sharon N. Tolbert, CEO F. Anticipated Completion Date: June 30, 2026