Corrective Action Plans

Reference Number: 2023-001 Prior Year Finding: No Federal Agency: U.S. Department of Labor Department Name: Mississippi Department of Employment Security Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: 7/1/22 – 6/30/23 Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report firsttier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. Control: Per 2 CFR section 200.303(a), 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. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Mississippi Department of Employment Security (MDES) did not report subaward information to FSRS within thirty days after issuing the subaward or subaward amendment. Context: Nine subawards were selected for testing which included five original subawards and four amendments. We noted the following exceptions:  1 of 9 subawards should have been reported by 11/30/2022 but was not reported before the end of FY 2023. The subaward was subsequently reported in February 2024.  3 of 9 subawards should have been reported by 5/31/2023 but were not reported before the end of FY 2023. The subawards were subsequently reported in February 2024.  4 of 9 subawards should have been reported no later than 2/28/2023 but they were reported on 3/29/2023, or 29 days late. Cause: MDES’s procedures and controls were not sufficient to ensure that subawards were reported to FSRS no later than the end of the month following the month of issuance. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend MDES establish procedures and internal controls to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance of each subaward. Views of responsible officials: MDES Response MDES concurs that the program year 2022 subawards were not entered into the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) within thirty days of subaward issuance. The practice of MDES has been to enter all subawards into the FSRS at one time and later perform a look back to determine the adjustments needed to bring the reported balances up or down based on subaward amendments made during the year. Specifically, for program year 2022 subawards, the initial entry into FSRS was on 3/29/2023 with the post award adjustment entry made February 23, 2024. Corrective Action Plan: a. MDES Plan: MDES will strengthen controls around FSRS reporting to ensure subawards are reported to FSRS within thirty days of issuance. MDES will also monitor subaward amendments and ensure they are reported within thirty days of issuance. Entries into the FSRS will be reviewed by the supervisor to ensure compliance. This process is effective immediately. b. Contact Person Responsible: Comptroller. c. Anticipated Corrective Action Plan Completion Date: July 15, 2024.

--RHPHF will establish policies for any qualifying federal funds detailing procedures for sub recipient risk evaluation and monitoring.

2023-003 Federal Award Special Reporting – Federal Funding Accountability and Transparency Act (FFATA) – Material Non-Compliance and Material Weakness in Internal Controls over Compliance Recommendation: The Organization should establish written policies and procedures regarding review of grant agreements for compliance requirements along with written policies and procedures for first-tier subawards including tracking and proper internal control procedures. Action Taken: Management concurs with the finding and has defined corrective action to address it. We have identified gaps in our reporting processes and worked to implement changes to ensure compliance with special reporting requirements. Policies and procedures will be updated regarding special reporting requirements. The Fiscal department will also be responsible for reviewing all contracts to identify all compliance requirements. Tracking procedures will be implemented to ensure reports are filed timely. The above identified corrective action was implemented in July 2024. Stacey Wilson, Fiscal Director, has implemented a tracking system for the FFATA.

NCHS has established a new structure, policy, and procedures. This new structure has the COO managing the accounting functions of Finance. We are currently fully staffed within our accounting department, with more SOP and a new software system that better supports the department. The COO and Accounting team now adheres to protocols and timelines that ensure timely and accurate completion of accounting tasks. The COO will continue to work with our auditors to ensure NCHS meet the filing deadlines.

To increase controls and improve preparation of accounting records. NCHS has reorganized the finance department. The accounting functions are now a part of Operations. With accounting reporting to operations, the Chief Operations Officer (COO) now oversees and provides support and leadership to this division of Finance. The COO has created and implemented new Standard Operation Processes (SOP). These new SOPs clearly define, documents, and support all accounting activities. The SOPs cover critical areas, including contract and grants management, reconciliation processes and month-end closings. The responsibilities of the accounting team are now clearly delineated, providing more transparency and accountability. A formal schedule for processing and reconciliation tasks has been established and maintained by the Senior Accountant. These schedules are reviewed monthly with the COO to ensure accuracy and timely completion of accounting tasks are occurring.

Finding 2023-003: Failure to Meet the Standards for Safeguarding Customer Information Comments on Finding and Recommendations: The College agrees with this finding as determined in the audit and states that the College has complied with the requirement. Actions Taken or Planned: Dragon Rises College of Oriental Medicine has completed the requirements and published the Information Security Program Compliance with Gramm-Leach-Bliley Act (GLBA). The College is committed to the preservation and security of personal data and is dedicated to adhering to regulations pertaining to the safeguarding of personal, sensitive, and other protected data within its purview. Name: Dr. Dorian G. Kramer DACM Title: Director Telephone: (941)-289-2456 Email: dkramer@dragonrises.edu

U.S Department of Homeland Security Staffing for Adequate Fire and Emergency Response (SAFER) – 97.083 Management’s Response: During 2024, management worked with the Fire Department and Payroll to ensure only straight time was coded to this grant and no overtime was charged to this grant. This was a finding in 2022 but we were not aware until the audit was completed in 2024 there was an issue the existing payroll system was not flagging. This has been corrected in in 2024 and should not be a recurring issue. Views of Responsible Officials and Corrective Action: The reason for recurrence is the finding was communicated late in the prior year. Management will work with stakeholders so that only the allowed costs are used as the basis of the reimbursement packet. We have also created fencing around allowed costs and period of performance in our new ERP system. Management will ensure this is addressed by December 31, 2024. Responsible Official: Dr. Shelley Kneuvean Chief Financial Officer Unified Government of Wyandotte County & Kansas City KS

Finding Number: 2023-002 Planned Corrective Action: Allowable Costs/Cost Principles Re: Noncompliance / Material Weakness/ Questioned Cost • ZMCHD has developed a spreadsheet for management to review time and activity of their staff including time worked and effort documentation quarterly based on actual time worked vs. budgeted time worked. Any necessary corrections will be shared with the fiscal officer to ensure corrections are made as necessary. • ZMCHD will ensure staff are educated on how to report time worked when they are doing activities for multiple programs and ensure that staff are disciplined when they are not reporting correctly. Anticipated Completion Date: 12/31/2024 Responsible Contact Person: Erin Wood, Chief Administrative Officer

Community Action of East Central Indiana, Inc. ceased operations as of July 31, 2024 for any new business. Community Development Institute (CDI), as contracted by the Office of Head Start, has taken over the leadership and operations.

2023-002 Cash management excessive cash and fund balances. A. Name of contact person responsible for corrective action: Name: Thomas J. Burleson Title: Business Administrator B. Corrective action planned: It is recommended that the district implement policies or procedures to establish an internal control system that will ensure funds are expended for reimbursable grants before requested reimbursement. C. Anticipated completion date: June 30, 2024.

Recommendation: CLA recommended that there is an appropriate reviewer of each claim, and expenditure reconciliation. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action planned/taken in response to finding: County will have someone other than the preparer review the report prior to submission going forward. Name(s) of the contact person(s) responsible for corrective action: Cate Wylie Planned completion date for corrective action plan: December 31, 2024

Finding #2023-004 – Material Weakness – Reporting 93.558 Temporary Assistance for Needy Families – Out of School Time Program 93.600 Head Start Untimely Submission of Required Reports Condition The Organization is required to submit quarterly financial and performance reports. The total population was eight reports and of those four were selected for testing. These financial and performance reports were not submitted to the granting agencies within the deadlines established by the terms and conditions of the federal awards. Recommendation We recommend that the Organization strengthen its internal controls to ensure that all required reports are submitted to granting agencies on time. Management should implement a centralized system to track reporting deadlines and designate responsible personnel to monitor and ensure compliance with these deadlines. Additionally, periodic reviews of the reporting process should be conducted to identify any potential issues and address them proactively. Management’s Corrective Action Plan The Organization agrees with this finding and has begun implementing corrective actions to ensure timely submission of required reports. The organization is in the process of developing a reporting schedule and assigning dedicated personnel to monitor deadlines. Contact Person: Cynthia Benton, Chief Financial Officer Anticipated Completion Date: June 30, 2024

Finding #2023-002 – Material Weakness – Activities Allowed or Unallowed, Allowable Cost Principles 93.558 Temporary Assistance for Needy Families – Out of School Time Program 93.600 Head Start Payroll Approval Condition During our audit of the Organization for compliance with Uniform Guidance requirements, we noted that the client was unable to provide sufficient evidence of management review or approval of payroll transactions before disbursement. Payroll costs were verified through additional supporting documentation including payroll registers and time cards. In total sixty-five payroll samples were selected for testing and the lack of review occurred for all items tested. Recommendation We recommend that Organization establish and enforce formal procedures requiring documented management review and approval of all payroll transactions before they are processed. The review process should be supported by evidence, such as approval signatures, electronic audit trails, or other verifiable records. In addition, management should perform regular reconciliations of payroll to ensure compliance with federal and organizational policies. Management’s Corrective Action Plan The Organization concurs with the finding and has already begun implementing a revised payroll approval process. Management is developing a formal payroll review policy, including electronic approval workflows, to ensure proper documentation and oversight of payroll prior to disbursement is maintained. Contact Person: Cynthia Benton, Chief Financial Officer Anticipated Completion Date: June 30, 2024

Finding 2023-001 – Material Weakness – Accounting Recordkeeping All Programs Other Condition During the year ended June 30, 2023, management was unable to provide timely year end trial balances in accordance with U.S. GAAP without significant adjusting journal entries required to accurately reflect the underlying accounting transactions. Recommendation We recommend that individuals overseeing the accounting and finance department continue to review the Organization’s current accounting policies and update existing policies or implement new policies, as needed, to ensure that the trial balances are accurately maintained throughout the year, reconciliations are completed and reviewed monthly or quarterly, as appropriate, and the trial balances and related supporting schedules are prepared and reviewed timely after year-end. Management’s Corrective Action Plan There was significant turnover in the finance department, including the CFO and the finance director. These turnovers affected the ability of the organization to produce the information on time for the auditors. The Organization is working with external consultants to improve the timeliness of reconciliations and audit preparation and recruiting vacant positions. We completed accounting policy changes which will correct the issues noted. Management is confident that the issues that have been noted will be rectified in the fiscal year ending June 30, 2024. Contact Person: Cynthia Benton, Chief Financial Officer Anticipated Completion Date: June 30, 2024

Response - Management agrees with the recommendation and will implement the necessary components of the recommendation. Accounting policies and procedures have been developed which pertain to our subrecipient reporting and monitoring and are in the process of being implemented. Also, by adding the bookkeeper in March of 2021, receipt spot checking of subrecipients on a monthly basis has been implemented to help ensure compliance.

Response - Management agrees with the recommendation and will continue to work at implementing the necessary components of the recommendation. New board members have come aboard and are working to implement changes. A finance committee has been established (independent of the CEO) and their role will be to ensure the adoption and recommendations of the CAP to ensure transparency and accountability. A bookkeeper was added March 2021 as another tier of financial control, along with CEO handing over some financial duties to the financial advisor and bookkeeper. Regular meetings are held by bookkeeper, financial advisor, and finance committee member of the Board. Please note though, that the small size of our staff, precludes the total elimination of this weakness.

The Agency agrees with this finding. As part of the subaward review process, the Chief Financial Officer will ensure that first tier subawards are checked to see if FFATA reporting is needed based on the award amount. If FFATA reporting is required, the Chief Financial Officer will assign this task to the Assistant Director for Financial Compliance to ensure that reporting is completed to the FFATA Reporting System FSRS.

We agree with this finding. The Chief Financial Officer in collaboration with the Assistant Director for Finance and the Assistant Director for Financial Compliance will set a calendar at the end of the fiscal year to ensure timely closeout of the books that will allow ample time to engage and complete the audit prior to the deadline for the FAC filing.

The Agency agrees with this finding. As part of the subaward review process, the Chief Financial Officer will ensure that first tier subawards are checked to see if FFATA reporting is needed based on the award amount. If FFATA reporting is required, the Chief Financial Officer will assign this task to the Assistant Director for Financial Compliance to ensure that reporting is completed to the FFATA Reporting System FSRS.

The City is fully committed to establishing and maintaining robust internal controls to ensure compliance with federal requirements, particularly in the administration of federal grant programs. Reporting: To meet Federal Funding and Transparency Act (FFATA) reporting requirements, the City will take the following actions: Update training material and implement annual training for all Accounting staff and City departments managing federal grants. Update and distribute monthly email to departments to clarify the required information for FFATA filing and require responses with supporting documentation for review. Periodically review federal reporting requirements for any updates and make adjustments as needed, utilizing resources such as the State Auditor’s Office (SAO) Newsletter, conferences, and trainings. Wage Rate Requirement: To meet Davis Bacon Act reporting requirements, the City will incorporate the verbiage from 29 CFR 5.5(a) in full into specifications, as applicable, which will be incorporated into the resulting contracts.

2023-001: Internal Control Over Financial Reporting Auditor's Recommendation: We recommend SWCAP implement procedures to ensure accounts are adjusted and that provided supplementary audit information is accurately prepared. Corrective Action: SWCAP experienced significant turnover in its accounting and finance team during the year. Immediate action has been taken and as of December 2024, SWCAP has identified and implemented changes with its personnel, hired an outsourced accounting firm, and implemented additional internal controls to include secondary level of review. SWCAP will make any additional changes necessary to complete the closing process and provide accurate financial information. Responsible for Corrective Action: Finance Team (Outsourced accounting firm, Operations Manager, Executive Director). Anticipated Completion Date: Completed as of December 2024.

MATERIAL WEAKNESS 2023-002 Policies and Procedures Auditor’s Recommendation: We recommend that the Foundation adopt a formal written procurement policy in the format and with the elements required by 2 CFR Sections 200.318 to 200.327. Action Taken: • As a First Year Single Auditee, the management team will ensure that senior leadership team, finance and accounting team, as well as program manager/directors for federal awards receive some form of training and certify receipt of this training within six-months of these findings no later than December 31st, 2024. • As a First Year Single Auditee, the management team will ensure that specific policies are created to ensure a procurement process for goods and services expensed from federal funds is established and in alignment with UG (Uniform Guidance) standards for federal awards no later than December 31st, 2024. • As a First Year Single Auditee, the management team will have an independent audit firm review this policy to ensure they are in alignment and conformance with UG (Uniform Guidance) standards no later than December 31st, 2024.

View of Responsible Officials and Corrective Action Plan – The Academies will develop a reliable system that will lead to the timely processing of the financial records by reviewing existing procedures to identify bottlenecks and areas of improvement. Feedback will be gathered from team members involved in the financial record keeping process so that standard procedures can be development and implemented. Furthermore, opportunities to automate processes and use software to assist with data entry, record reconciliation, and reporting can be used. This will significantly decrease manual workload and improve accuracy and timeliness.

View of Responsible Officials and Corrective Action Plan – Management will monitor the review and approval procedures for reporting to ensure that reports are signed off to indicated and document that review and approval has been made.

All Nations Health Center has switched EHR systems that allows for intake coordinators to suspend/pause eligibility status until all proper documentation has been obtain from the client, scanned into the system, and filed appropriately.