Corrective Action Plans

Finding Number: 2022-001 Planned Corrective Action: The School District has already implemented policies and procedures to ensure timely updating and has documented the remedies taken for the items noted as noncompliant in the audit. Anticipated Completion Date: January 31, 2023 Responsible Contact Person: Donna Solano, Financial Aid Coordinator

Finding Number: 2022-002 Planned Corrective Action: The HVAC capital assets will be documented in the capital asset records. Anticipated Completion Date: September 30, 2023 Responsible Contact Person: Stacy Bolden, Treasurer

FINDING 2022-004 Contact Person Responsible for Corrective Action: Shawn Spindler, Business Manager/Treasurer Contact Phone Number: 812.926.2090 Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: We will ensure that any future private school expenses are incurred and paid by the district instead of reimbursing the private schools their expenses. This will be reviewed by the Director of Curriculum to ensure compliance. Anticipated Completion Date: March 2023

FINDING 2022-003 Contact Person Responsible for Corrective Action: Shawn Spindler, Business Manager/Treasurer Contact Phone Number: 812.926.2090 Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: We will ensure that any future capital equipment gets included on our inventory list. This will be reviewed by the Superintendent to be sure all equipment is added. Anticipated Completion Date: March 2023

2022-001 ? Review and Approval of the Schedule of Expenditures of Federal Awards (SEFA) ? We feel that much was learned in the audit process by Organization staff and Palm Beach Accounting and Financial Services. We will make the Schedule of Expenditures of Federal Awards a priority in the next audit, and if need will retain an expert consultant to assist in the preparation prior to providing to the audit firm.

2022-030 Oregon Housing and Community Services Ensure controls over administrative expenditure limits are properly designed and sufficiently detailed to ensure compliance Federal Awarding Agency: U.S. Department of the Treasury Assistance Listing Number and Name: 21.023 Emergency Rental Assistance Program (COVID-19) Federal Award Numbers and Years: ERA 1, 2021; ERA 2, 2021 (COVID-19) Compliance Requirement: Allowable Costs/Cost Principles Type of Finding: Material Weakness Prior Year Finding: N/A Questioned Costs: N/A Criteria: 2 CFR 200.303(a), (c)-(d); 15 U.S.C. 9058a(c)(5)(A); 15 U.S.C. 9058c(d)(1)(C) Department management is responsible for establishing and maintaining effective internal control that provides reasonable assurance the department is managing, evaluating, and monitoring the federal award in compliance with the terms and conditions of the award and taking prompt action when instances of noncompliance are identified. Federal regulations limit the amount of federal funds that can be used for administrative expenditures. The department periodically prepared tracking spreadsheets during the fiscal year to monitor spending and ensure administrative expenditure limitations were not exceeded. We reviewed four randomly selected tracking spreadsheets and noted two tracking spreadsheets where there was insufficient detail to determine what category expenditures were associated with (administrative versus programmatic); and three tracking spreadsheets where there was no indication that the expenditures were within administrative expenditures limitations due to the periodic nature of the tracking. Without sufficiently designed and implemented controls, the department is at risk for exceeding their allowable administrative cost limits. We recommend department management ensure tracking spreadsheets are properly designed and sufficiently detailed to ensure compliance with administrative expenditures limitations. MANAGEMENT RESPONSE: We agree with this recommendation. This was a very fast-paced, complex award with multiple layers of funding. OHCS did have and continues to have a pulse on administrative costs from the various admin funding sources and has not exceeded those allowable limits. Reporting was routinely compiled to show the various allocations and expenditures to date, which included administrative costs. Reporting was not provided in a consistent manner as information from multiple systems was needed, however program and fiscal staff met regularly to review. OHCS is taking careful steps to design a system that will consistently track awards while ensuring spending is in alignment with requirements and is distributed in a timely fashion. In doing so we will create a more consistent framework for tracking new awards to ensure limits and expenditures are consistently documented. Anticipated Completion Date: December 31, 2023 Contact: Jill Smith, Director of Housing Stabilization Division or Beth Brown, Accounting Manager

2022-029 Oregon Housing and Community Services Ensure accessible documentation to evidence compliance with program requirements Federal Awarding Agency: U.S. Department of the Treasury Assistance Listing Number and Name: 21.023 Emergency Rental Assistance Program (COVID-19) Federal Award Numbers and Years: ERA 1, 2021 (COVID-19) Compliance Requirement: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Eligibility Type of Finding: Material Weakness Prior Year Finding: N/A Questioned Costs: N/A Criteria: 2 CFR 200.302(a); 2 CFR 200.332(a)(5) Department management is responsible for communicating to subrecipients that they are required to permit the department and auditors access to their records as necessary to ensure the department is compliant with program requirements. To ensure compliance with program requirements, subrecipient records must also be sufficiently detailed. The department passed through $140 million phase one program funds to community action agencies (subrecipients) to provide program delivery. The department performed limited fiscal monitoring during the audit period which included procedures to address compliance with activities allowed and allowable cost requirements for administrative costs. The department did not perform any program monitoring during the audit period which primarily addresses compliance with eligibility requirements. To determine whether the department complied with program requirements for the fiscal year, auditors attempted to reconcile detailed subrecipient ledgers with the intent of selecting and testing sample items at each individual subrecipient organization. We noted issues with two individual subrecipients, resulting in an inability to perform testing procedures over a total of $21,438,521 in program expenditures. For the first subrecipient we were able to reconcile their detailed ledgers to the department?s financial records, however their detailed ledger included pass-through payments to a third organization for program delivery. As a result of the combination of direct and pass-through payments, we were unable to obtain sufficiently detailed data that also reconciled to the department?s financial records to select individual transactions for testing. This subrecipient represents $19,877,962 of the unaudited expenditures. For the second subrecipient we were able to reconcile their detailed ledgers to the department?s financial records and select administrative and program transactions for testing. However, the subrecipient was unresponsive to documentation requests to substantiate expenditures. This subrecipient accounted for $1,560,559 of the unaudited expenditures. We recommend department management obtain and reconcile sufficiently detailed subrecipient ledgers and support to substantiate expenditures to allow for fiscal and program monitoring to ensure subrecipients are administering program funds in accordance with program requirements. MANAGEMENT RESPONSE: We agree with this recommendation. To effectively deliver much needed funds to maintain the housing stability of tens of thousands of Oregonians on the brink of experiencing homelessness during the pandemic, agency staff raced to stand up a first-of-its-kind ?single entry point? program for Oregonians to apply for assistance regardless of zip code. In our efforts to focus on speed we acknowledge that there was insufficient planning and capacity to stand up a large-scale emergency program including sufficient assurances our subrecipients could generate evidence of compliance with program requirements including transaction level details to assist with reconciliation. Oregon?s experience is in line with national findings. According to the January 2021 research brief conducted by the National Low Income Housing Coalition around key program challenges with administering emergency rental assistance programs. Survey respondents listed the two most common limitations to be staff capacity and the completeness of applications. Many agencies leaned on whatever local capacity was available to develop programs, review, and process applications, make payments and conduct outreach. Corrective action plan: OHCS had significant compliance monitoring staff turnover in FY22 leading to incomplete subrecipient monitoring reviews. OHCS completing these reviews would?ve ensured subrecipients had adequate time to produce necessary documentation to evaluate compliance, or if not, subrecipients would?ve been required to take corrective actions. For fiscal compliance, OHCS hired a contractor to perform fiscal monitoring of federal funded Grantees. OHCS also hired fiscal staff to pre-FY22 levels, fully trained them, conducted coordinated working sessions, and reached out to the CAA network for discussions on improving processes. OHCS continues to work with the contractor for much needed assistance in monitoring of back log while internal staff move forward to allow for all monitoring to be back on schedule and coordinating both fiscal and program compliance during future fiscal years. Program compliance employees have been hired and compliance efforts are underway. All providers will have internal compliance visits at regular intervals to ensure they have necessary documents and eligibility is being determined in compliance with program requirements. Additionally regular and ongoing check ins and trainings are being offered by program staff. Finally, program compliance teams are working with the Finance compliance team as well as a contracted expert to develop systems and processes in alignment with the Finance compliance team. As a result of program compliance efforts, a risk evaluation is being developed and incorporated into future contracting decisions. Efforts in hiring and systemic investments in infrastructure, processes, and procedures in addition to partner communications have taken place to ensure agency readiness in the event another emergency occurs. As part of our commitment to continual learning, our OHCS research team is collaborating closely with university and national partners to analyze our ERA program data and findings to see what themes emerge for improvement both nationally and in Oregon. Anticipated Completion Date: December 31, 2023 Contact: Jill Smith, Director of Housing Stabilization Division and Dean Criscola, Controller

2022-028 Oregon Housing and Community Services Ensure Federal Funding Accountability and Transparency Act reporting is completed Federal Awarding Agency: U.S. Department of the Treasury Assistance Listing Number and Name: 21.023 Emergency Rental Assistance Program (COVID-19) Federal Award Numbers and Years: ERA 1, 2021 (COVID-19); ERA 2, 2021 (COVID-19) Compliance Requirement: Reporting Type of Finding: Material Weakness, Material Noncompliance Prior Year Finding: N/A Questioned Costs: N/A Criteria: 2 CFR 200.303(a), (c)-(d); 2 CFR 170, Appendix A I(a) Department management is responsible for establishing and maintaining effective internal control that provides reasonable assurance the department is managing, evaluating, and monitoring the federal award in compliance with the terms and conditions of the award and taking prompt action when instances of noncompliance are identified. The Federal Funding Accountability and Transparency Act (FFATA) requires the department to submit information for any subaward action that equals or exceeds $30,000. Program guidance required the department to report detailed subaward information directly to the federal awarding agency. This detailed subaward information encompassed all requirements related to FFATA, and the federal awarding agency gave the department the option of filing required FFATA reports on their behalf. The department stated they did not provide the detailed subaward information to the federal awarding agency to complete FFATA reporting on their behalf, and they did not complete any alternate FFATA submissions during the fiscal year due to grant award information not being available on the federal website to file their reports. As a result, the department is not in compliance with FFATA reporting requirements. We recommend department management ensure FFATA reporting is completed. MANAGEMENT RESPONSE: We agree with this recommendation. Oregon was not unique. Many states experienced frustration with the lack of clarity in the reporting process. For example, the National Coalition for State Housing Agencies sent a Feb 8, 2022 letter to urge Treasury to fix technology problems with its reporting portal, streamline reporting requirements and provide technical assistance to ERA grantees. Oregon also experienced challenges getting responses from Treasury about around reporting questions, but we understand that our federal partners were also operating under emergency circumstances and were also strained to capacity. Corrective action plan: OHCS has attempted multiple times to submit the FFATA, however the award was never made available to report on within the system. OHCS has also reached out to US Treasury multiple times to confirm that we were not required to report but have yet to hear directly from US Treasury. OHCS was able to confirm and received a response from US Treasury that went to another state that grantees were not required to complete the FFATA on the federal reporting website as US Treasury was doing that on behalf of the recipient, and OHCS did share that correspondence with SOS. Although US Treasury has been nonresponsive, OHCS will continue to attempt to obtain a direct response from US Treasury for our own records. Anticipated Completion Date: December 31, 2023 Contact: Beth Brown, Accounting Manager

2022-027 Oregon Housing and Community Services Ensure Monthly and Quarterly reports are accurate and adequately supported Federal Awarding Agency: U.S. Department of the Treasury Assistance Listing Number and Name: 21.023 Emergency Rental Assistance Program (COVID-19) Federal Award Numbers and Years: ERA 1, 2021; ERA 2, 2021 (COVID-19) Compliance Requirement: Reporting Type of Finding: Material Weakness; Material Noncompliance Prior Year Finding: N/A Questioned Costs: N/A Criteria: 2 CFR 200.302(a) and (b)(3); 2 CFR 200.303(a), (c)-(d) Department management is responsible for establishing and maintaining effective internal control that provides reasonable assurance the department is managing, evaluating, and monitoring the federal award in compliance with the terms and conditions of the award and taking prompt action when instances of noncompliance are identified. Additionally, the department is responsible for maintaining records to allow for submission of reports that are accurate and adequately supported. We tested four randomly selected monthly reports and found one report did not accurately report the number of unique households assisted and the amount of the assistance based on the supporting documentation. The department stated the differences were likely due to a transition in subsystem reporting formats and delays in report processing. We tested four quarterly reports, two of which were randomly selected and two of which were judgmentally selected. We found one report where the cumulative obligation amount did not agree to supporting documentation and were not accurate, and one report where the cumulative obligation and cumulative expenditures amounts did not agree to supporting documentation and were not accurate. The department stated these errors were due to erroneously entered information in the federal awarding agency?s reporting portal. Information included in these reports is used by the federal awarding agency to determine whether the department qualifies for receiving reallocation payments, as well as how much of a reallocation would be awarded to the department. Errors in these reports could result in errors in the federal awarding agency?s determination of eligibility for funding, and/or the reallocation formula. We recommend department management update and correct erroneous reports and establish controls to ensure reported amounts are accurate and adequately supported. MANAGEMENT RESPONSE: We agree with this recommendation. Numerous Community Action Agencies (CAAs), after months of exponential growth in program resources without time to strategize and scale operations, reported major capacity issues a chronic backup of applications at the local level. OHCS took the unprecedented step to augment CAA staff to contract with a third-party vendor to clear the backlog. This approach rapidly increased production and moved the federal program closer in line with the state?s then 60-day safe harbor period but came with additional monitoring and reporting challenges. OHCS did meet the reporting timelines and requirements of US Treasury. OHCS relied on information within the applicant tracking system that does have some discrepancies when compared to our accounting records. These discrepancies are due to various factors such as dates within the system causing application activity to be pulled into the reporting detail more than once, or the application tracking system not being updated with the most current payment record information by some grantees disbursing payments. These variances were overcome by relying on our accounting system and records as a control source of actual disbursements. During the audit, it was brought to our attention that the compilation of the application tracking system data at a point in time was not stored to demonstrate the reconciliation with the accounting information. SOS was then not able to verify the application tracking system data figures in one monthly reporting instance that were used to support the numbers reported to US Treasury as the file had likely been overridden. Similarly in one instance, the quarterly cumulative report was also impacted, however future cumulative figures were reported correctly. Corrective action plan: While OHCS submitted monthly and quarterly reports since program inception that include program and fiscal information, we acknowledge that there were some discrepancies between systems when one file was overridden with new information and one other file contained an error. We have taken steps to ensure data integrity and records retention moving forward and future compilations of the application tracking system data will be stored to support the point in time reconciliations and figures reported to US Treasury. One quarterly report will also be refiled if allowable by US Treasury to ensure quarterly figures reported are accurate. Data integrity is of the utmost importance to the agency, and we appreciate the thorough review by the auditing team. Anticipated Completion Date: June 30, 2023 Contact: Beth Brown, Accounting Manager

2022-020 Oregon Housing and Community Services Controls are needed to ensure buildings renovated for use as emergency homeless shelters are maintained as shelters for the period required Federal Awarding Agency: U.S. Department of Housing and Urban Development Assistance Listing Number and Name: 14.231 Emergency Solutions Grants Program (COVID-19) Federal Award Numbers and Years: E-20-DW-41-0001, 2020 (COVID-19) Compliance Requirement: Special Tests and Provisions Type of Finding: Material Weakness; Material Noncompliance Prior Year Finding: N/A Questioned Costs: N/A Criteria: 24 CFR 576.102(c) Federal regulations require that buildings renovated with ESG-CV funds for use as emergency homeless shelters must be maintained as shelters for not less than a period of 3 or 10 years, depending on the type of renovation and value of the building. Initial inquiries with program staff determined that the department was not aware whether its subrecipients were using program funds to renovate buildings for use as emergency homeless shelters. Subsequently, program staff indicated the information may be contained in subrecipient implementation reports. However, there were no known procedures or processes in place to monitor the use of funds during the fiscal period. Therefore, it is possible buildings renovated with program funds may not be maintained as emergency shelters for the minimum required time period. We recommend agency management develop internal controls to ensure buildings renovated for use as emergency homeless shelters are maintained as shelters for the period required. MANAGEMENT RESPONSE: We agree with this recommendation. Program monitoring for all ESG recipients is on track to be completed for State FY23. Our program manuals state the restrictive use period requirements for any rehabilitation, renovation, conversion, or maintenance of real property. OHCS? program manuals clearly define and outline the requirements for approval of acquisition-renovation-rehabilitation, expectations regarding restrictive use periods based on project type, as well as a requirement for an annual certificate of continuing program compliance. The continuing program compliance requirement allows subrecipients to self-certify that a property is meeting the required restrictive use requirement and that all populations being served meet eligibility criteria of the program(s) funding the project. These requirements will be verified and reviewed as part of program monitoring. Anticipated Completion Date: December 24, 2023 Contact: Jill Smith, Director of Housing Stabilization Division

Finding Number: 2022-005 Finding Title: Allowable Costs/Cost Principles and Reporting Program: Medical Assistance Program 93.778 Name of Contact Person Responsible for Corrective Action: Nicole Hegge - Sr. Manager, Accounting - Finance and Central Services Corrective Action Planned: In order to appropriately report the revenue offset that may impact federal programs, we have updated our quarterly process ensuring that any federal revenue offsets are included in the appropriate fund and report. In some instances, this may still require the County to file amendments to federal reports; however, they will be completed no later than eight weeks following the end of the quarter. Anticipated Completion Date: December 31, 2023

Finding Number: 2022-003 Finding Title: Internal Controls over Payroll Name of Contact Person Responsible for Corrective Action: Cory Kampf - CFO - Finance and Central Services Emily Wilson - Supervisor, Accounting - Finance and Central Services Corrective Action Planned: The Mass Approval Process does not overwrite the individual time sheet approval. The reports showing this were not available at the time of the audit and are being developed to resolve this issue. Discontinuing the Mass Approval may result in the need to process additional supplemental payrolls for those individuals that were not paid on the regular payday. We continue to develop additional training and tools for supervisors to help them with their responsibilities for approving time. Also, we are looking at developing procedures around supplemental payrolls with the plan to minimize the need for them. Anticipated Completion Date: December 31, 2023

Finding #2022-002- Material Adjustments (Prior Year Finding #2021-002) Condition: Johnson Block and Company, Inc. proposed multiple adjusting journal entries. We deem these entries to be significant in relation to the financial statements. Since the District did not make these adjustments in its accounting system prior to the audit, a material weakness exists in the District?s internal controls. Criteria: Material adjusting journal entries not prepared by the District before the audit are considered an internal control weakness. Effect: This means that the proper recording and reporting of financial information may not occur within a timely manner. Cause: Financial information was not recorded in a timely manner and material adjustments were needed in order to report properly. Recommendation: Policies and procedures should be implemented to ensure account balances are properly recorded in a timely manner. Response: The District will work to establish policies and procedures to reduce the number of adjusting journal entries proposed by the auditor Contact Person: Tracy Case Anticipated Completion: Not Applicable

Finding: 2017-001 - Material Audit Adjustments, Financial Statement Preparation, and Preparation of the Schedule of Expenditures of Federal Awards (Repeat Finding) Auditor Description of Condition and Effect: We prepared, and management approved of, significant adjustments to the Authority?s general ledger. Material adjustments were discovered during the audit process and because of this condition, the Authority is not in compliance with the required written procedures under the Uniform Guidance. As is the case with many small and medium-sized governmental units, the Authority has historically relied on its independent external auditor to assist with the preparation of the financial statements, the related notes, the management?s discussion and analysis, and, when applicable, the schedule of expenditures of federal awards, as part of its external financial reporting process. Accordingly, the Authority?s ability to prepare financial statements in accordance with GAAP, as well as the Uniform Guidance, is based, in part, on its reliance on its external auditor, who cannot, by definition, be considered part of the Authority?s internal controls. Having the auditor draft the annual financial statements is allowable under current auditing standards and ethical guidelines and may be the most efficient and effective method for preparation of the Authority?s financial statements. However, when an entity (on its own) lacks the ability to produce financial statements that conform to GAAP, or when material audit adjustments are identified by the auditor, auditing standards require that such conditions be communicated in writing as material weaknesses. Auditor Recommendation: The Authority should continue to monitor the relative costs and benefits of securing the internal or other external resources necessary to develop material adjustments and prepare a draft of the Authority?s annual financial statements versus contracting with its auditor for these services. Corrective Action: We concur with the finding and management has made an ongoing evaluation of the respective costs and benefits of obtaining internal or external resources, specifically for the preparation of financial statements, and has determined that the additional benefits derived from implementing such a system would not outweigh the costs incurred to do so. Management will continue to review the draft financial statements and notes prior to approving them and accepting responsibility for their content and presentation. Responsible Person: Becky Freeman ? Office Manager Anticipated Completion Date: June 30, 2023

Finding 2022-005 ? Allowable Costs (Material Weakness and Non-compliance) CORRECTIVE ACTION: FRLS is evaluating our allocation method to ensure that finance and accounting works with grants management to ensure grant allowable expenses are followed. FRLS followed the corrective action plan and hired a grants manager to review and repair grant allocations. FRLS is aware that there have been numerous issues with grant allocations resulting in grant funding issues, which we have worked to correct. FRLS also reiterates to staff the importance of following existing accounting policies and procedures with respect to documenting and approval of expenditures. We are currently in the process of reviewing our policy with respect to the allocation of expenditures to specific grants to ensure that it meets the guidelines of various grants, as reported by grants management. We expect to complete this review and implement any necessary changes by the fourth of 2023.

Finding ref number: 2022-001 Finding caption: The District did not have adequate internal controls for ensuring compli-ance with federal requirements for allowable activities and costs. Name, address, and telephone of District contact person: Katrin Williams, Business Manager PO Box 118 Adna, WA 98522 (360)748-0362 Corrective action the auditee plans to take in response to the finding: The District concurs and will review the current and future year?s indirect cost rates for ESSER re-imbursements. Anticipated date to complete the corrective action: Completed

FINDING 2022-001 Contact Person Responsible for Corrective Action: LaGrange County Auditor Contact Phone Number: (260) 499-6310 Views of Responsible Official: We concur with the findings from SBOA. Description of Corrective Action Plan: We will work towards segregation of duties to ensure preventing, or detecting and correcting noncompliance. Once the P & E report is prepared, a separate employee will review the report prior to submission. Anticipated Completion Date: When the next report is filed we will implement these procedures.

RE: Finding 2022-002, Maintain Employees' Time and Effort Records To whom it may concern: Time and Effort Records have been maintained as of the start of the 2022-2023 fiscal year. The District is now in compliance and will be going forward. Tom Lafleur Director of Finance and Operations

Finding #2022-002 ? Material Adjustments (Prior Year Finding #2021-002) Condition: Johnson Block and Company, Inc. proposed numerous adjusting journal entries to adjust District account balances. We deem these entries to be significant in relation to the financial statements. Since the District did not make these adjustments in the accounting system prior to the audit, a material weakness exists in the District?s internal controls. Effect: This means that the proper recording and reporting of financial information may not occur within a timely manner. Cause: Financial information was not recorded in a timely manner and material adjustments were needed in order to correct various transactions. Criteria: Material adjusting journal entries not prepared by the District before the audit are considered an internal control weakness. Recommendation: Policies and procedures should be implemented to ensure account balances are properly recorded in a timely manner. Response: The District will work to establish policies and procedures to reduce the number of adjusting journal entries proposed by the auditor. Contact Person: Sam Lehman, Phone number: 608-935-3307, Email: slehman@draschools.org Anticipated Completion: June 30, 2023

Audit Finding Reference: 2022-003 Improve Controls and Documentation over Payroll Process Planned Corrective Action: The Portland Public School District's payroll operations have been under strain since its conversion to a new software system (Munis) in January 2019. Certain modules and functionalities were not set up completely or correctly prior to launch, which necessitated workarounds, time-consuming manual processing, and error correction. These challenges were compounded by staff turnover, staffing shortages, and the heightened pressures across the district caused by the pandemic. As a result certain systems, processes, procedures, and documentation protocols have weakened over this time. PPS is aware of this and has been working toward a permanent solution to the root cause of the payroll challenges. In collaboration with outside consultants, PPS has entered into an agreement to transition to ADP as a third-party payroll provider for the district, with expected implementation in fall 2023. PPS has retained a project manager for the transition, whose focus will not only be the technical software transition but also ensuring that sound policies, procedures, and controls are in place alongside system capabilities that meet the needs of the district. Additionally, PPS intends to invest in additional HR staff in order to implement new workflow that ensures appropriate segregation of duties, review, and documentation of employee pay information. Name of Contact Person: Terry Young Ed.D Executive Director of Operations Portland Public Schools 353 Cumberland Avenue Portland, ME 04101 Direct: (207) 842-5333 Anticipated Completion Date: 11/1/2023

Finding 2022-004 Improve Time and Effort Documentation Planned Corrective Action: The Housing and Economic Development Department will establish a process to document time and effort certifications for salaried employees, and ensure that compliance is monitored on an ongoing basis by the HCD Division Director. Anticipated Completion Date: May 1, 2023 Contact Person: Mary Davis, Interim Department Director, Housing and Economic Development and Division Director, Housing and Community Development

Finding Number: 2022-002 Condition: We examined $1,746,599 of federal funds reimbursed to the City from the State Revolving Fund award during the year. Management informed us and we verified that $134,102 of reimbursements were for ineligible construction costs as these amounts were bid alternates that were not allowed uses of the federal award. Further, management informed us and we verified that $17,253 of federal reimbursements were received for a duplicate construction invoice. Further, as a result of reviewing the ineligible costs, management found that in fiscal year 2021, ALN 66.458 included $5,768 in ineligible expenditures, and the overall total expenditures was understated by $184,073. In addition, ALN 14.228 had expenditures of $229,554 that were understated in fiscal year 2021, and ALN 10.760 had expenditures totaling $81,228 that were understated in fiscal year 2021. Planned Corrective Action: The City adopted an allowable cost policy on 04/17/23. Contact person responsible for corrective action: Kathryn Beemer, City Administrator Email: kbeemer@fennville.com Office Phone: 269-561-8321 Cell Phone: 269-543-2645 Anticipated Completion Date: 04/17/23

Finding 2022-006 Federal Listing Number 16.560 - Subrecipient Monitoring Corrective Action Plan Management will document the internal control procedures used to manage federal awards to ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. The internal control procedures will include the monitoring of Subrecipients. Anticipated Completion Date November 30, 2023 Name of Contact Person Responsible for Corrective Action Angelo DeSantis, YPTC

Finding 2022-005 Federal Listing Number 16.560 - Subrecipient Monitoring Corrective Action Plan Management will document the internal control procedures used to manage federal awards to ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. The internal control procedures will include the monitoring of Subrecipients. Anticipated Completion Date November 30, 2023 Name of Contact Person Responsible for Corrective Action Angelo DeSantis, YPTC

Corrective action the auditee plans to take in response to the finding: We applied for set aside funding from HUD for this issue as an unforeseen circumstance and awarded $25,000. Although insufficient in amount, we added a part-time admin assistant and a full-time second HQS inspector. Both positions continue in our 2023 budget. Anticipated date to complete the corrective action: The corrective action was completed in the first quarter of 2023, and PCHA is in full compliance as of the second quarter of 2023.