Corrective Action Plans

Finding 1219549 (2025-004)

Material Weakness 2025

SD

Special Tests & Provisions Subrecipient Monitoring Cash Management § 200.303

Federal Agency Name: Department of Agriculture Program Name: Community Facilities Loans and Grants Federal Financial Assistance Listing Number: 10.766 Finding Summary: As a part of the audit process, a reclassification entry was made to move an additional 12 months of reserve funds from the cash swe...

Federal Agency Name: Department of Agriculture Program Name: Community Facilities Loans and Grants Federal Financial Assistance Listing Number: 10.766 Finding Summary: As a part of the audit process, a reclassification entry was made to move an additional 12 months of reserve funds from the cash sweep general fund to a separate bookkeeping account. The Hospital had excess cash available to cover the required reserve amount for the fiscal year. Responsible Individuals: Renae Karst, Chief Financial Officer Corrective Action Plan: Management will fund the reserve account from the cash sweep general fund and will monitor the separate bookkeeping account throughout the year to ensure the reserve is properly funded throughout the year as required by the loan documents. Anticipated Completion Date: June 30, 2026

View Audit 405128

Finding 1219546 (2025-003)

Material Weakness 2025

Mobridge Regional Hospital

SD

Reporting Material Weakness Matching / Level of Effort / Earmarking

Federal Agency Name: Department of Agriculture Program Name: Community Facilities Loans and Grants Federal Financial Assistance Listing Number: 10.766 Finding Summary: The Hospital does not have an internal control system designed to provide for a complete and accurate schedule of expenditures of fe...

Federal Agency Name: Department of Agriculture Program Name: Community Facilities Loans and Grants Federal Financial Assistance Listing Number: 10.766 Finding Summary: The Hospital does not have an internal control system designed to provide for a complete and accurate schedule of expenditures of federal awards being audited. Management requested the auditors, Eide Bailly LLP, to assist with the preparation of the schedule of expenditures of federal awards. Responsible Individuals: Renae Karst, Chief Financial Officer Corrective Action Plan: It is not cost effective to have an internal control system designed to prepare the schedule of expenditures of federal awards. We requested that our auditors, Eide Bailly LLP, to assist with the preparation of the schedule of expenditures of federal awards. We have designated a member of management to review the drafted schedule of expenditures of federal awards, and we have reviewed with and agree with the final Schedule of Expenditures of Federal Awards. Anticipated Completion Date: Ongoing

View Audit 405128

Finding 1219135 (2025-005)

Material Weakness 2025

Kearsarge Elderly Housing, Inc.

NH

HUD Housing Programs Material Weakness

Finding 2025-005 Plan: Please see below the new process regarding hiring additional staff and turnover at Community Action Program Belknap-Merrimack Counties Inc. Due to lack of management, it is understood the importance of having staff training on a regular basis to ensure management and complianc...

Finding 2025-005 Plan: Please see below the new process regarding hiring additional staff and turnover at Community Action Program Belknap-Merrimack Counties Inc. Due to lack of management, it is understood the importance of having staff training on a regular basis to ensure management and compliance duties can be performed adequately. Community Action Program Belknap-Merrimack Counties Inc. plans to improve the standards of employee training and will be hosting quarterly trainings on employee responsibilities, performance, and areas for improvement. This includes HUD trainings and keeping up to date on any new HUD policies and procedures. We understand the importance of a well-trained staff. We are committed to our performance and adhering to HUD standards while implementing policies to follow for continuous improvement. Please see below the new process regarding filling vacancies and completing management duties in a timely manner: 1. Immediate Focus on Vacancies: We are prioritizing the filling of vacant units by having two staff members complete move ins at the same time. 2. Streamlined Recertification Process: We have updated our process to ensure all tenants are recertified in a timely manner. There has been a new system in place to monitor deadlines and improve efficiency. 3. Staffing and Training: We are actively recruiting and training additional staff to ensure these tasks are handled promptly, preventing future delays. These steps will address the backlog of management duties and ensure that all tasks, such as filling vacancies and completing tenant recertifications, are handled in a timely and efficient manner. Completion Date: 11/1/2026 Contact: Jackie Oliveira-Director of Affordable Housing

View Audit 405074

Finding 1219129 (2025-002)

Material Weakness 2025

Kearsarge Elderly Housing, Inc.

NH

Internal Control / Segregation of Duties Eligibility Material Weakness

Finding 2025-002 Plan: The Human Resource Director will work with Paylocity to find out why the mapping on the file they provide was incorrect. The Human Resource Director will have Paylocity (our third party payroll provider) make the necessary corrections on their end, so this will not happen agai...

Finding 2025-002 Plan: The Human Resource Director will work with Paylocity to find out why the mapping on the file they provide was incorrect. The Human Resource Director will have Paylocity (our third party payroll provider) make the necessary corrections on their end, so this will not happen again. Anticipated Completion Date: 12/31/2025 Contact: Jill Lesmerises, CFO

View Audit 405074

Finding 1219062 (2025-001)

Material Weakness 2025

The Salvation Army Northwest Division

WA

Subrecipient Monitoring Eligibility Material Weakness

PLANNED CORRECTIVE ACTION The Division will contact each unit distributing TEFAP assistance to reinforce the requirement to retain documentation regarding the determination of client eligibility and will review and strengthen existing policies and procedures related to form completion and retention....

PLANNED CORRECTIVE ACTION The Division will contact each unit distributing TEFAP assistance to reinforce the requirement to retain documentation regarding the determination of client eligibility and will review and strengthen existing policies and procedures related to form completion and retention. The Division's Social Services department will implement a quarterly internal review process to provide increased oversight and monitoring across all distributing units. ANTICIPATED COMPLETION DATE 10/1/26 RESPONSIBLE CONTACT PERSON Julie Luft, NW Social Services Director

View Audit 405060

Finding 1219039 (2025-002)

Material Weakness 2025

Almost Home, Inc.

CO

Subrecipient Monitoring Eligibility Material Weakness § 200.303

Almost Home, Inc. has formalized this through our required client file checklist and related policy. The policy was in place and was applied improperly. Staff members who failed to apply the policy were given corrective action at the time. Our quality/compliance control processes did not catch this ...

Almost Home, Inc. has formalized this through our required client file checklist and related policy. The policy was in place and was applied improperly. Staff members who failed to apply the policy were given corrective action at the time. Our quality/compliance control processes did not catch this mistake in time, and our management corrective action plan will include improvements on the quality/compliance control to ensure that all necessary documentation is maintained. Also necessary to note is the fact that Almost Home, Inc. will no longer receive TANF funding as of December 31, 2025.

View Audit 405057

Finding 1219023 (2025-002)

Material Weakness 2025

St Croix Valley Supportive Housing for the Elderly, Inc.

WI

HUD Housing Programs Cash Management Material Weakness

Section 202 HUD-Insured Mortgage– Assistance Listing No. 14.157 The Project is required to make a deposit into the residual receipts account within 90 days after year end in the amount of any surplus cash. Recommendation: We recommend management ensure they have the controls and processes in place t...

Section 202 HUD-Insured Mortgage– Assistance Listing No. 14.157 The Project is required to make a deposit into the residual receipts account within 90 days after year end in the amount of any surplus cash. Recommendation: We recommend management ensure they have the controls and processes in place to make the residual receipts deposit timely. Action taken in response to finding: Management will review procedures to ensure they have the process in place to ensure timely deposit going forward. Name of the contact person responsible for corrective action: Thomas Krolak Planned completion date for corrective action plan: October 2025

View Audit 405038

Finding 1219019 (2025-002)

Material Weakness 2025

Regent at Apple Valley, LLC Dba: the Seasons at Apple Valley

MN

HUD Housing Programs Material Weakness Internal Control / Segregation of Duties

Section 232 HUD-Insured Mortgage– Assistance Listing No. 14.129 Distributions and payments on surplus cash notes must be within amounts permitted based upon semi-annual surplus cash calculations. Recommendation: Recommend that management account for surplus cash note payments when determining how mu...

Section 232 HUD-Insured Mortgage– Assistance Listing No. 14.129 Distributions and payments on surplus cash notes must be within amounts permitted based upon semi-annual surplus cash calculations. Recommendation: Recommend that management account for surplus cash note payments when determining how much cash is available for distribution in accordance with the semi-annual surplus cash calculations and review those calculations for accuracy prior to distributions being made. There is no disagreement with the audit finding. Action taken in response to finding: We have surplus cash remaining at December 31, 2025, subsequent to the distributions being made, therefore the finding has corrected itself. Future distributions and payments on surplus cash notes will be monitored closely to ensure they are limited to amounts permitted. Name of the contact person responsible for corrective action: Doug Harrison Planned completion date for corrective action plan: December 31, 2026

View Audit 405026

Finding 1219018 (2025-001)

Material Weakness 2025

Regent at Apple Valley, LLC Dba: the Seasons at Apple Valley

MN

HUD Housing Programs Material Weakness Internal Control / Segregation of Duties

Section 232 HUD-Insured Mortgage– Assistance Listing No. 14.129 Management is required to retain the HUD approved management agreement to ensure payments made are in accordance with HUD requirements. The Project does not have a HUD approved management agreement. Recommendation: Recommend that manage...

Section 232 HUD-Insured Mortgage– Assistance Listing No. 14.129 Management is required to retain the HUD approved management agreement to ensure payments made are in accordance with HUD requirements. The Project does not have a HUD approved management agreement. Recommendation: Recommend that management work with HUD to have the current management agreement approved. There is no disagreement with the audit finding. Action taken in response to finding: We have contacted HUD to obtain an approved management agreement. Name of the contact person responsible for corrective action: Doug Harrison Planned completion date for corrective action plan: December 31, 2026

View Audit 405026

Finding 1218915 (2025-003)

Material Weakness 2025

The Salvation Army Golden State Division

CA

Material Weakness School Nutrition Programs Equipment & Real Property Management

The Division is in the process of designing and implementing a precise control to ensure that the inventory reports are reviewed prior to being submitted to the grantor and that the backup documentation is maintained. Anticipated Completion Date: 9/30/2026 Responsible Contact Person: Michael Zielins...

The Division is in the process of designing and implementing a precise control to ensure that the inventory reports are reviewed prior to being submitted to the grantor and that the backup documentation is maintained. Anticipated Completion Date: 9/30/2026 Responsible Contact Person: Michael Zielinski, Major, Divisional Commander.

View Audit 404948

Finding 1218896 (2025-002)

Material Weakness 2025

The Salvation Army Golden State Division

CA

Eligibility Subrecipient Monitoring Material Weakness

The Division is in the process of designing and implementing a precise control to ensure that participants self-certify that they meet the grant eligibility requirements and that such evidence is maintained. Anticipated Completion Date: 9/30/2026 Responsible Contact Person: Michael Zielinski, Major,...

The Division is in the process of designing and implementing a precise control to ensure that participants self-certify that they meet the grant eligibility requirements and that such evidence is maintained. Anticipated Completion Date: 9/30/2026 Responsible Contact Person: Michael Zielinski, Major, Divisional Commander.

View Audit 404948

Finding 1218877 (2025-001)

Material Weakness 2025

The Salvation Army Golden State Division

CA

Allowable Costs / Cost Principles Subrecipient Monitoring Material Weakness § 200.502

The Division is in the process of designing and implementing a precise control to ensure that the amount of food distributed is properly reviewed and that the Division maintains such evidence. Anticipated Completion Date: 9/30/2026 Responsible Contact Person: Michael Zielinski, Major, Divisional Com...

The Division is in the process of designing and implementing a precise control to ensure that the amount of food distributed is properly reviewed and that the Division maintains such evidence. Anticipated Completion Date: 9/30/2026 Responsible Contact Person: Michael Zielinski, Major, Divisional Commander.

View Audit 404948

Finding 1218801 (2025-002)

Material Weakness 2025

Ponca Tribe of Nebraska

NE

Eligibility Internal Control / Segregation of Duties Procurement, Suspension & Debarment § 200.303

Persons responsible for corrective action: Keith Morrow, Health Services Chief Executive Officer Corrective action planned: Developed and implemented process by which Business Services staff in Health Services review documents provided by non-Ponca Native Americans upon initial request for services ...

Persons responsible for corrective action: Keith Morrow, Health Services Chief Executive Officer Corrective action planned: Developed and implemented process by which Business Services staff in Health Services review documents provided by non-Ponca Native Americans upon initial request for services and on an annual basis to follow to confirm and verify their capacity to receive health services from the Ponca Tribe. Steps have been taken to see the staff verifying are independent from those who initially collect such documents. Additionally, confirmed such process is consistent with existing verification review of Ponca members requesting services. Implementation date: December 1, 2025.

View Audit 404885

Finding 1218790 (2025-001)

Material Weakness 2025

City of Lowell

MA

Allowable Costs / Cost Principles Subrecipient Monitoring Material Weakness

Audit Finding Reference: 2025-001 Maintain Employee's Time and Effort Records Planned Corrective Action: The District will implement and enforce a formal time and effort reporting process for all employees whose salaries are charged to federal programs. The process will include: 1. Identification of...

Audit Finding Reference: 2025-001 Maintain Employee's Time and Effort Records Planned Corrective Action: The District will implement and enforce a formal time and effort reporting process for all employees whose salaries are charged to federal programs. The process will include: 1. Identification of all employees whose compensation is funded, in whole or in part, by federal awards. 2. C.ompletion of required semi-annual certifications or periodic personnel activity reports, as applicable, in accordance with Uniform Guidance requirements. 3. Review and approval of certifications bysupervisory personnel to ensure accuracy and completeness. 4. C.entralized maintenance of all certifications by the Grants Office to ensure records are readily available for audit and monitoring purposes. 5. Development of a compliance calendar with established due dates and reminder notifications for required certifications. 6. Quarterly monitoring bythe Business Office to verifythat all required certifications have been completed, reviewed, and retained. Planned Implementation Date of Corrective Action: The District has begun implementing these procedures and will have the revised process fully operational by 6/30/2026. All required certifications for the current fiscal year will be collected and maintained going forward. Person Responsible for Corrective Action: Grants Manager, Funds Analyst, Deputy Chief Financial Officer Signature Derek Pinto, Assistant Superintendent of Finance

View Audit 404883

Finding 1218776 (2025-002)

Material Weakness 2025

City of Lowell

MA

Procurement, Suspension & Debarment Subrecipient Monitoring Allowable Costs / Cost Principles § 200.327

Audit Finding Reference: 2025-002 Improve Procurement Procedures Planned Corrective Action: The District will strengthen its procurement procedures for federally funded purchases to ensure compliance with Uniform Guidance requirements. Specifically, the District will: 1. Revise procurement procedure...

Audit Finding Reference: 2025-002 Improve Procurement Procedures Planned Corrective Action: The District will strengthen its procurement procedures for federally funded purchases to ensure compliance with Uniform Guidance requirements. Specifically, the District will: 1. Revise procurement procedures to clearly identify when federal procurement requirements apply in addition to state and local procurement regulations. 2. Develop and implement a federal procurement checklist that must be completed prior to the award of any contract funded in whole or in part with federal grant funds. 3. Work with the Law Department to establish standardized contract templates containing all required federal contract provisions, including the Byrd Anti-Lobbying Amendment when applicable. 4. Require a secondary review bythe Business Office or Grants Management personnel before contract execution to verify compliance with Uniform Guidance procurement standards and required contract clauses. 5. Provide annual training to Business Office staff, grant managers, and other personnel involved in procurement activities regarding federal procurement requirements and contract provisions. 6. Conduct periodic internal reviews of federally funded procurement transactions to ensure ongoing compliance. Planned Implementation Date of Corrective Action: The revised procedures, procurement checklist, and standardized contract templates will be implemented by7 /1/2026. Training will be completed for applicable staff during the current fiscal year and prior to the initiation of future federally funded procurements. Person Responsible for Corrective Action: Assistant Superintendent of Finance Derek Pinto, Assistant Superintendent of Finance

View Audit 404883

Finding 1218744 (2025-001)

Material Weakness 2025

Town of Southbridge, Massachusetts

MA

Allowable Costs / Cost Principles Material Weakness Matching / Level of Effort / Earmarking § 200.430

Finding 2025-001 Condition: Time and effort certifications were not maintained for grant employees. Corrective Action Planned: Southbridge Public Schools will be creating and implementing procedures for time and effort certifications. The procedure will include use of the form distributed by the Mas...

Finding 2025-001 Condition: Time and effort certifications were not maintained for grant employees. Corrective Action Planned: Southbridge Public Schools will be creating and implementing procedures for time and effort certifications. The procedure will include use of the form distributed by the Massachusetts Department of Elementary and Secondary Education for employees who are paid by a grant and require a time and effort certification. Anticipated Completion Date: July 31, 2026 Contact: Matthew Robidoux – Business Manager

View Audit 404856

Finding 1218734 (2025-004)

Material Weakness 2025

City of Hill City

MN

Procurement, Suspension & Debarment Material Weakness

Suspension and Debarment Recommendation: We recommend the City implement a written suspension debarment policy or procedures that comply with the Uniform Guidance. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Th...

Suspension and Debarment Recommendation: We recommend the City implement a written suspension debarment policy or procedures that comply with the Uniform Guidance. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The City will adopt a formal suspension and debarment policy. Name of the contact person responsible for corrective action: Tami Meyer Planned completion date for corrective action plan: December 31, 2026

View Audit 404825

Finding 1218716 (2025-061)

Material Weakness 2025

State of Michigan

MI

Internal Control / Segregation of Duties Subrecipient Monitoring Allowable Costs / Cost Principles § 200.303

Finding 2025-061 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), ALN 93.323 and Block Grants for Prevention and Treatment of Substance Abuse, ALN 93.959 Management Views MDHHS agrees with the finding. Planned Corrective Action MDHHS is actively pursuing the implementation of an A...

Finding 2025-061 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), ALN 93.323 and Block Grants for Prevention and Treatment of Substance Abuse, ALN 93.959 Management Views MDHHS agrees with the finding. Planned Corrective Action MDHHS is actively pursuing the implementation of an API for the submission of FFATA data to the federal system, SAM, to improve both timeliness and accuracy through automation. This API will connect EGrAMS with SAM, enabling backend communication between the systems and allowing SAM to automatically retrieve data directly from EGrAMS. To ensure accurate reporting until the API is established, MDHHS will continue reviewing validation errors when submitting web-based information to SAM and will work with the SAM federal helpline to report federal system issues and identify interim alternatives to submit the required data. Also, MDHHS implemented an enhancement in August 2025 that validates federal funding sources in EGrAMS against their effective dates, reducing coding errors and improving data reliability. In addition, the query used to obtain certain FFATA data elements was modified during fiscal year 2026 to improve accuracy of reporting. Anticipated Completion Date December 31, 2027 Responsible Individual(s) Matt Blackburn, MDHHS Jeanette Hensler, MDHHS Rebecca Jones, MDHHS

View Audit 404775

Finding 1218704 (2025-013)

Material Weakness 2025

State of Michigan

MI

Eligibility Subrecipient Monitoring Material Weakness § 200.516

Finding 2025-013 Medicaid Cluster, ALN 93.775, 93.777 and 93.778 and Children’s Health Insurance Program, ALN 93.767 - Beneficiary Eligibility Management Views MDHHS agrees with the identified exceptions for parts a. and c. However, MDHHS disagrees that 2 Medicaid cases and 11 CHIP cases with MAGI d...

Finding 2025-013 Medicaid Cluster, ALN 93.775, 93.777 and 93.778 and Children’s Health Insurance Program, ALN 93.767 - Beneficiary Eligibility Management Views MDHHS agrees with the identified exceptions for parts a. and c. However, MDHHS disagrees that 2 Medicaid cases and 11 CHIP cases with MAGI determinations cited in part b. lacked documentation supporting the eligibility determination. CMS has determined that a reasonable compatibility indicator can be used for CMS audit purposes to determine if the attested income information was electronically verified for MAGI cases. For this reason, MDHHS disagrees that documentation was not maintained. The State of Michigan (SOM) MiIntegrate system communicates with various electronic State and federal trusted data sources and sends information from these sources, along with the beneficiaries’ attested income, to the SOM MAGI Rules Engine where the MAGI eligibility determination is made. As part of the MAGI eligibility determination, a reasonable compatibility test is completed to determine if beneficiary/applicant attested income is within a specified percentage of the trusted data sources or if the attested and verified income are below the threshold for the applicable program. The results of the MAGI eligibility determination are sent back to MiIntegrate using an Account Transfer (AT) packet that contains the results. MiIntegrate then communicates the results to the SOM MAGI Viewer and Bridges using an AT packet and Bridges stores the AT packet number only that can be used to view the details of the AT packet within the SOM MAGI Viewer. The version of the AT packet within the MAGI Viewer also contains a reasonable compatibility indicator that documents the outcome of the reasonable compatibility test and supports the SOM MAGI Rules Engine eligibility decision. MDHHS stores the AT packet information, including facts essential to the eligibility determination, within MiIntegrate and the MAGI viewer instead of Bridges to help protect and secure the federal income tax data and unemployment data used for the determination. The AT packet for each individual determination can be retrieved from the MAGI Viewer using the AT packet number stored in each beneficiary’s case file within Bridges. MDHHS is not aware of any federal regulations that preclude MDHHS from storing this information in a separate, secure system to ensure appropriate data protection and access controls required by federal and State laws. Planned Corrective Action To address the exceptions identified that are not related to MAGI-based income verification results, MDHHS developed mandatory training protocols for eligibility specialists, and the first Medicaid audit-focused mandatory training was implemented in June 2025. MDHHS will continue to determine where additional training or enhancements to training are needed to ensure eligibility is accurately determined and documentation is properly maintained within the electronic case file. For the exception that did not contain the appropriate coverage termination date, MDHHS reviewed the case and determined that the beneficiary remained eligible to transition to another aid category, and therefore no improper payments occurred. MDHHS will identify the system issue that produced the incorrect termination date and will implement a system fix if necessary. Should such an improvement be identified, it will be submitted through the Departmental Work Intake Process for prioritization and implementation by the Bridges technical team. MDHHS maintains that documentation supporting MAGI eligibility determinations is retained within MiIntegrate and the MAGI Viewer and therefore disagrees that case file documentation was not maintained. As such, no further corrective action is planned. Anticipated Completion Date June 30, 2027 Responsible Individual(s) Logan Dreasky, MDHHS Brant Cole, MDHHS Mariah Schaefer, MDHHS

View Audit 404775

Finding 1218703 (2025-011)

Material Weakness 2025

State of Michigan

MI

Subrecipient Monitoring Material Weakness Reporting

Finding 2025-011 MDHHS - FFATA Reporting Management Views MDHHS agrees with the finding. Planned Corrective Action MDHHS is actively pursuing the implementation of an application programming interface (API) for the submission of the Federal Funding Accountability and Transparency Act (FFATA) data to...

Finding 2025-011 MDHHS - FFATA Reporting Management Views MDHHS agrees with the finding. Planned Corrective Action MDHHS is actively pursuing the implementation of an application programming interface (API) for the submission of the Federal Funding Accountability and Transparency Act (FFATA) data to the federal system, the System for Award Management (SAM), to improve both timeliness and accuracy through automation. This API will connect the Electronic Grants Administration and Management System (EGrAMS) with SAM, enabling backend communication between the systems and allowing SAM to automatically retrieve data directly from EGrAMS. To ensure accurate reporting until the API is established, MDHHS will continue reviewing validation errors when submitting web-based information to SAM and will work with the SAM federal helpline to report federal system issues and identify interim alternatives to submit the required data. Also, MDHHS implemented an enhancement in August 2025 that validates federal funding sources in EGrAMS against their effective dates, reducing coding errors and improving data reliability. In addition, MDHHS modified the query used to obtain certain FFATA data elements during fiscal year 2026 to improve accuracy of reporting. Anticipated Completion Date December 31, 2027 Responsible Individual(s) Matt Blackburn, MDHHS Jeanette Hensler, MDHHS Rebecca Jones, MDHHS

View Audit 404775

Finding 1218701 (2025-005)

Material Weakness 2025

State of Michigan

MI

Eligibility Subrecipient Monitoring Material Weakness

Finding 2025-005 Income Eligibility and Verification System Management Views MDHHS agrees with parts a., b., and d. of the finding. MDHHS disagrees with parts c. and e. of the finding. For part c., MDHHS disagrees with the conclusion that a process is not fully established to monitor the electronic ...

Finding 2025-005 Income Eligibility and Verification System Management Views MDHHS agrees with parts a., b., and d. of the finding. MDHHS disagrees with parts c. and e. of the finding. For part c., MDHHS disagrees with the conclusion that a process is not fully established to monitor the electronic notifications provided to county/district office caseworkers to ensure they utilized the Income Eligibility and Verification System (IEVS) information to determine the recipients’ eligibility. MDHHS had policies and procedures in place during fiscal year 2025 to help ensure monitoring of electronic notifications occurred. Review of IEVS information is fully incorporated into the case read procedure governed by Bridges Administrative Manual 301 and further detailed in accompanying desk aids and reading guides. The MDHHS Economic Stability Administration (ESA) also provides regular direction and reminders regarding case read requirements through ESA memos. For part e., MDHHS disagrees that IEVS information is required to be requested and obtained for Medicaid Cluster Healthy Kids, Healthy Michigan Plan, Children’s Health Insurance Program (CHIP) Healthy Kids, and MiChild modified adjusted gross income (MAGI) based recipients since eligibility is verified upon determination through the MAGI eligibility determination process. MAGI verification rules are contained within federal regulation 42 CFR 435.603, which describes electronic verification through the Federal Data Services Hub, reasonable compatibility standards, and verification at application and renewal. The Centers for Medicare and Medicaid Services (CMS) MAGI Application and Eligibility Process Implementation Guides describe MAGI verification as a streamlined, electronic process using the federal hub and state data sources with no reference to IEVS. The IEVS rules are contained within federal regulations 42 CFR 435.940 through 42 CFR 435.965 and are part of the non-MAGI verification framework. Planned Corrective Action For parts a. and b., MDHHS ESA will continue to provide guidance and training to local office specialists on timely and appropriate use of IEVS when the information is critical to current eligibility determinations. MDHHS ESA will also continue to evaluate potential technical and automated solutions related to IEVS data to help ensure its proper utilization and timeliness. For parts c. and e., MDHHS disagrees with the finding and does not intend to take further action. For part d., MDHHS is collaborating with other work areas to identify potential solutions to establish and implement IEVS interfaces for adoption subsidy recipients funded by the Temporary Assistance for Needy Families (TANF) program. Anticipated Completion Date a. and b. Ongoing c. Not applicable d. MDHHS has not yet determined an anticipated completion date because the date is dependent on the potential solutions identified. e. Not applicable Responsible Individual(s) a., b., and c. Veronica Maxson and Mariah Schaefer, MDHHS d. Kathonya Triplett, MDHHS e. Logan Dreasky, MDHHS

View Audit 404775

Finding 1218700 (2025-004)

Material Weakness 2025

State of Michigan

MI

Internal Control / Segregation of Duties Subrecipient Monitoring Eligibility § 200.303

Finding 2025-004 Bridges Security Management and Access Controls Management Views MDHHS agrees with the finding. Planned Corrective Action For parts a., b., c., and d., MDHHS implemented the Database Security Application (DSA) on October 2, 2023, which includes documenting incompatible role exceptio...

Finding 2025-004 Bridges Security Management and Access Controls Management Views MDHHS agrees with the finding. Planned Corrective Action For parts a., b., c., and d., MDHHS implemented the Database Security Application (DSA) on October 2, 2023, which includes documenting incompatible role exception requests and user access request approvals, semi-annual review of privileged users, and annual review for all users. Security management and access control processes will continue to be a standing agenda item for ongoing quarterly training sessions with local office security coordinators (LOSC). For parts a., c., and d., the Access Management Section began implementing a process to conduct quarterly reconciliations of the DSA to the Bridges Integrated Automated Eligibility Determination System (Bridges) during March 2025. Due to the complexity of the reconciliations and time constraints, MDHHS requested the Bridges technical team to develop a consolidated Excel based report to add a level of automation to the process. The report is now available on an ad hoc basis, and the Access Management Section began utilizing it during April 2026 to conduct reviews and provide remediation with the LOSCs and end users. Full automation of the report remains in progress due to significant competing priorities and limited resources. For part b., MDHHS implemented the automated DSA periodic access review process (PAR) during January 2026 to review all users every 90 days, instead of the current 180 days for privileged users. MDHHS updated its policy to require initiation of the PAR in the DSA for all users every 90 days, without exception, to comply with State standards. For part e., MDHHS local office directors, district managers, or designees review a monthly sample of high-risk Bridges transactions to ensure documentation was properly maintained. Beginning September 2024, MDHHS Business Service Centers (BSC) implemented a monitoring process to ensure monthly reviews are completed by the local offices timely and that the documentation is properly maintained. To strengthen compliance, MDHHS will reinforce expectations through manager training and emphasize the requirement to maintain complete records and to sign and date all review reports within 30 days of the report run date. Additional training sessions will be repeated as needed to ensure consistent adherence to documentation and timeliness standards across all local offices. Anticipated Completion Date a., c., and d. Ongoing b. Completed e. September 30, 2026 Responsible Individual(s) a., b., c., and d. Tim Kwast, MDHHS e. Tim Kwast and Veronica Maxson, MDHHS

View Audit 404775

Finding 1218684 (2025-055)

Material Weakness 2025

State of Michigan

MI

Internal Control / Segregation of Duties Subrecipient Monitoring Material Weakness

Finding 2025-055 Social Services Block Grant, ALN 93.667 - Post-Expenditure Report Management Views MDHHS agrees with the finding. Planned Corrective Action MDHHS is modifying the process to obtain the required post-expenditure report data to ensure all individuals receiving Social Services Block Gr...

Finding 2025-055 Social Services Block Grant, ALN 93.667 - Post-Expenditure Report Management Views MDHHS agrees with the finding. Planned Corrective Action MDHHS is modifying the process to obtain the required post-expenditure report data to ensure all individuals receiving Social Services Block Grant supported services are appropriately included. Also, MDHHS will add a program validation step to review the applicable federal regulations and confirm the data extracted is accurate and complete. In addition, MDHHS will revise and resubmit the fiscal year 2025 report by September 30, 2026. Anticipated Completion Date September 30, 2026 Responsible Individual(s) Tiffany Clarke, MDHHS Rebecca Jones, MDHHS Mary Lou Mahoney, MDHHS Aimee McDaniel, MDHHS

View Audit 404775

Finding 1218661 (2025-051)

Material Weakness 2025

State of Michigan

MI

Eligibility Subrecipient Monitoring Material Weakness § 200.516

Finding 2025-051 Low-Income Home Energy Assistance, ALN 93.568 - Eligibility Determinations Management Views MDHHS agrees with the finding. Planned Corrective Action In May 2025, MDHHS issued memo 2025-20, which implemented mandatory training requirements for all eligibility staff and their managers...

Finding 2025-051 Low-Income Home Energy Assistance, ALN 93.568 - Eligibility Determinations Management Views MDHHS agrees with the finding. Planned Corrective Action In May 2025, MDHHS issued memo 2025-20, which implemented mandatory training requirements for all eligibility staff and their managers to address audit-related findings. The State Emergency Relief (SER) training courses occur biannually, in March and August, and cover verification of client income, client contribution payments, and proof of energy crisis. To ensure accuracy of payment processing, in October 2025, MDHHS issued memo 2025-48 which implemented the mandatory SER Reconciliation Report requirement. As part of this updated process, each county office must run the SER Energy Reconciliation Report weekly and review all energy-related payments to ensure accuracy and confirm that required documentation is maintained. In addition, MDHHS will continue to communicate with BSCs and local offices regarding the requirements to maintain sufficient documentation to support SER processing through formal internal communication channels. MDHHS will also continue to provide direct SER guidance and clarification through the SER mailbox. Further, MDHHS will explore a potential system enhancement that will provide automated solutions for an added layer of efficiency and compliance. Should such an improvement be identified, it will be submitted through the Departmental Work Intake Process for prioritization and implementation by the Bridges technical team. Anticipated Completion Date MDHHS has not yet determined an anticipated completion date because the completion date is dependent on the priority assigned to system enhancements as determined by the Departmental Work Intake Process. Responsible Individual(s) Bethany Cabanaw, MDHHS Kent Schulze, MDHHS Julie McLaughlin, MDHHS

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Finding 1218655 (2025-049)

Material Weakness 2025

State of Michigan

MI

Reporting Subrecipient Monitoring Material Weakness

Finding 2025-049 Refugee and Entrant Assistance State/Replacement Designee Administered Programs, ALN 93.566 - FFATA Reporting Management Views LEO agrees with the finding. LEO is fully committed to improving its FFATA process. It is LEO’s position that the switch from the FFATA Subaward Reporting S...

Finding 2025-049 Refugee and Entrant Assistance State/Replacement Designee Administered Programs, ALN 93.566 - FFATA Reporting Management Views LEO agrees with the finding. LEO is fully committed to improving its FFATA process. It is LEO’s position that the switch from the FFATA Subaward Reporting System to SAM for FFATA reporting in March 2025 contributed to some of the cited deficiencies. Planned Corrective Action The LEO Finance Division is currently working with the LEO Grants Division to determine a better process of notification for new subawards and amendments so that they can be reported within the required timeframe. The process will be documented in an updated formal procedure which focuses on timely communication as the primary control and SIGMA Business Intelligence queries as a secondary control to ensure completeness of reporting. Anticipated Completion Date June 30, 2026 Responsible Individual(s) Heidi Parker, LEO Chris Johnson, LEO

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