Corrective Action Plans

2025-002 Child Nutrition Cluster - Assistance Listing No. 10.555, 10.582 Recommendation: We recommend the Department develop procedures and internal controls to ensure that all required subawards are reported timely and accurately to SAM.gov no later than the end of the month following the month of issuance of each subaward. If the Department is unable to complete reporting in SAM.gov, it should follow up with the Service Desk and consult with their federal award contacts for assistance and guidance. Action taken in response to finding: The Department is reviewing and updating internal procedures to ensure all required subawards are reported timely and accurately in SAM.gov. While there have been some technical challenges with SAM.gov reporting, the Department is actively coordinating with U.S. Department of Agriculture contacts to resolve issues and ensure compliance and maintaining a record of each outreach attempt. Staff responsibilities and monitoring procedures are being strengthened to support accurate reporting. Name(s) of the contact person(s) responsible for corrective action: Julia Jou, Budget Director, Rob Curtin, Deputy Commissioner, Erica Gonzales, Associate Commissioner Data & Accountability, Rob Leshin, Director, Food and Nutrition Programs Joseph Valchuis, Audit Supervisor Planned completion date for corrective action plan: April 15, 2026

Provided training to staff on HUD EIV requirements and documentation standards. Updated the tenant file checklist to include a mandatory EIV report verification step:  Conducted an internal audit of all tenant files to identify any additional missing or late EIV reports.  Implement a quarterly compliance review process to ensure ongoing adherence to EIV requirements.

DHS will review existing Medical Assistance and income calculation policies, make any necessary changes, and provide refresher training for staff at all levels of eligibility for various types of Medical Assistance. In addition, reminders about the Medical Assistance Policy will be included in monthly unit meetings. DHS will complete targeted Medical Assistance case reviews, and a review of system (Gateway) designs will be conducted to identify any necessary changes, updates, and additional improvements.

GDOL now freezes the overpayment data at the end of every month so we can conduct periodic reconciliation of the overpayment records. This will allow discrepancies to be identified faster and resolved before the deadline to submit the report for the specified period. GDOL consults with USDOL’s national 227 reporting specialists on an ongoing basis to work towards a reconciliation of previously submitted reports. Federal regulations require an actual person to review and establish fraudulent overpayments. Due to the volume of claims and the number of cross matches to be performed on all state and federal pandemic programs, it requires multiple GDOL staffing levels to manually review all cross matches, requiring increased levels of state and federal funding. The crossmatch process is conducted using a software which runs a systematic check against weeks in a quarter for which benefits are paid, and wages are reported during the same quarter. Although the program may detect weeks paid and wages reported, this alone is not indicative of an overpayment. Therefore, the process involves verification correspondence being sent to both the claimant and the employer, as applicable, to verify the status of employment, the wages earned as well as the weeks in which an individual worked and earned the wages. Based on responses, an assessment is made to determine if an overpayment exists and subsequent actions are taken accordingly. We are prohibited from assuming a match is an overpayment. It is not an overpayment until we have completed a full investigation and provided due process to all parties. The Department has a significant number of pending and potential overpayment investigations that may result in either a non-fraud or fraud determination. We are utilizing merit and time-limited staff to maximize productivity by conducting fact-finding interviews, assessing case details, creating overpayments in the system, and making overpayment determinations. The statutes provide that an overpayment be established up to four years after such occurrence, act, or omission. Additionally, GDOL has procured a vendor to build and implement a modernized UI system slated to be launched in 2026. We will continue to utilize available resources to investigate and establish overpayments in the legacy system as quickly as possible and will continue to do so within the program parameters in the new system. Throughout CY 2025, GDOL participated in quarterly meetings with United States Department of Labor (USDOL) and other regional states to discuss fraud, overpayment issues and best practices used. These meetings will continue in CY2026.

We have documented our procedure for performance reporting so that reports are appropriately reviewed and approved prior to submission.

GDOL’s current UI Tax system was developed in 1982 using mainframe legacy technology. Due to its age and structural limitations, many automated financial record-keeping processes and corrective controls cannot be easily implemented. As a long-term solution to strengthen internal controls and enhance overall UI program administration, GDOL has contracted with a vendor to implement a more efficient method for maintaining documentation of taxes due and received. Migration to the modernized system is anticipated in late 2026. A review of the thirteen accounts identified the source of each payment, the amounts remitted, and the associated tax account allocations. Our records showed all payments, except for one, were submitted electronically via ACH Debit or ACH Credit. These ACH transactions are reflected as components of the total daily ACH Debits or Credits shown on the agency’s bank statement spreadsheets for the dates associated with the payments. The Contribution Tax amount represents only a portion of the total tax due. Therefore, the payment amount and the Contribution Tax amount may differ.

Corrective Action Plan for the year ended December 31, 2025 IFFs most recent A-133 Audit Report identi�ied a Material Weakness regarding the validation of lack of suspension or debarment for vendors used for the below mentioned grant. Material Weakness Identi�ied in A-133 Audit CFDA No: 14.251 Federal Awarding Agency & Program: U.S. Department of Housing and Urban Development - Economic Development Initiative, Community Project Funding, and Miscellaneous. Finding 2025-001: Suspension and Debarment Criteria: Uniform Grant Guidance (2 CFR 180) requires nonfederal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure suspension and debarment procedures are properly followed and documented, with supporting information maintained, as required by 2 CFR 180. Condition: Out of 4 vendors tested, we noted 4 (100%) vendors from which IFF procured furniture, equipment and appliances without verifying the vendors’ status for suspension and debarment. Based on discussion with management, IFF did not have a process to ensure required suspension and debarment procedures were performed. Cause: Management did not suf�iciently identify grant requirements which resulted in nonperformance of required procedures over suspension and debarment. Uniform Grant Guidance 2 CDR 180: § 180.220 Are any procurement contracts included as covered transactions? (a) Covered transactions under this part: (1) Do not include any procurement contracts awarded directly by a federal agency; but (2) Do include some procurement contracts awarded under nonprocurement covered transactions. (b) Speci�ically, a contract for goods or services is a covered transaction if any of the following applies: (1) The contract is awarded by a participant in a nonprocurement transaction covered under § 180.210, and the contract amount is expected to equal or exceed $25,000. (2) The contract requires the consent of an of�icial of a federal agency. In that case, the contract is always a covered transaction regardless of the amount or who awarded it. For example, it could be a subcontract awarded by a contractor at a tier below a nonprocurement transaction, as shown in the Appendix to this part. (3) The contract is for Federally required audit services. (c) A subcontract also is a covered transaction if: (1) It is awarded by a participant in a procurement transaction under a nonprocurement transaction of a Federal agency that extends the coverage of paragraph (b)(1) of this section to additional tiers of contracts (see the diagram in the Appendix to this part showing that optional lower tier coverage); and (2) The value of the subcontract is expected to equal or exceed $25,000. § 180.225 How do I know if a transaction in which I may participate is a covered transaction? As a participant in a transaction, you will know that it is a covered transaction because of the Federal agency regulations governing the transaction. The appropriate Federal agency of�icial or participant at the next higher tier who enters into the transaction with you will tell you that you must comply with applicable portions of this part. Subpart C—Responsibilities of Participants Regarding Transactions Doing Business With Other Persons § 180.300 What must I do before I enter into a covered transaction with another person at the next lower tier? When you enter a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disquali�ied. You do this by: (a) Checking SAM.gov Exclusions; or (b) Collecting a certi�ication from that person; or (c) Adding a clause or condition to the covered transaction with that person. IFF Management Response: IFF did not have a process in place requiring veri�ication of any vendor Suspensions or Debarment where we utilized Federal Grant dollars. The majority of purchases for this project were under $25,000, although cumulative expenditures could very well have exceeded this amount. Corrective Action Taken: Once management become aware of the noncompliance condition, the Community Development Solutions team led by our Vice President of Community Development Solutions, Eden Hurd-Smith, made sure to check each vendor in SAM.gov and con�irmed that each vendors’ status was in fact not suspended or debarred from receiving federal grant proceeds. Corrective Action Planned: Through the work of our President and Core Operating Of�icer, Tara Townsend, we are already in process of implementing processes that address this gap in our current Business Enterprise Mapping processes. There are two places we are making changes: 1. In our Contract/Grant Management processes, we will identify and document all requirements tied to any funding source and contract in our Contract Tracker. In onboarding that contract, we will make sure our systems are set up to ensure that we comply with those requirements which will be con�irmed in the tracker. 2. In our Contracted Services/Vendor Management processes, we will use the requirements outlined in the Contract Tracker to de�ine the requirements for vendor procurement. In cases like this one, that would include checking the vendor’s status in SAM. Those �indings will be documented in our Vendor Management System, along with other vendor characteristics. We will also be doing routine updates and checks to ensure the ongoing accuracy of the information about vendors once they are in our Vendor Management database. Management intends to ensure that our vendor contracts would incorporate attestations re�lecting any of the requirements for vendors identi�ied through the Contracts/Grants Management processes. Responsible Individuals: Tara Townsend, President and Core Operating Of�icer, and Eden HurdSmith, Vice President of Community Development Solutions. Anticipated Completion Date: Late 2nd Quarter/Early 3rd Quarter 2026

2025-002 Staffing for Adequate Fire and Emergency Response (SAFER) – CFDA No. 97.083 Recommendation: The City should provide training for the grant administrator and/or include an additional review by individual that has been fully trained on the compliance requirements of the grant. The internal control process should include a formal way to document the review and approval of Fire Safety salary costs charged to the grant to provide evidence that internal controls are effectively designed and implemented and functioning in a timely manner throughout the year. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action planned and taken in response to finding: The City has authorized a full-time grants specialist position within the Finance Department to oversee the administration of grants separate from the programming department. The City will strengthen internal controls over grant compliance by implementing formal policies and procedures for allowable costs, documentation, and review. All grant expenditures will be reviewed and approved by Finance prior to submission, with supporting documentation maintained for eligibility determinations. Name(s) of the contact person(s) responsible for corrective action: Rebeca Holden Planned completion date for corrective action plan: 06/30/26 If the Tennessee Comptroller of the Treasury has questions regarding this plan, please call Rebecca Holden at 931-451-0782

Condition: The Organization obtained a short term line of credit without formal approval from HUD from Park National Bank in 2024 with access to credit up to $15 million, which exceeds the limits in section 20b(iii) of the HUD agreement. Planned Corrective Action: On February 21, 2024, Change Healthcare / Optum sustained a cyber-attack and completely shut down claim’s submission processes for Knox Community Hospital. With over 3 weeks of not releasing insurance claims that amounted to over $40M, this impacted the cashflow greatly on the organization. The CFO at that time made the decision to seek a Line of Credit with Park National Bank for $15M to fund operations. Due to the urgency and short timeline, formal approval was not obtained from HUD. A detailed event log was maintained around the cyber-attack and provided to our Board and HUD representative. In the future, all regulatory agreements’ requirements will be reviewed by the CFO and in time there are new agreements or modifications made to existing agreements to ensure compliance with each agreement. HUD has since issued a letter approving KCH’s $15M Line of Credit. Contact person responsible for corrective action: Danielle O’Brien, CFO Anticipated Completion Date: 4/30/2026

The Town of Spruce Pine will strengthen internal controls over the identification, tracking, and reporting of federal and state awards. Management will maintain a comprehensive, centralized listing of all known and potential federal and state awards throughout the fiscal year, including assistance listing numbers, award amounts, and pass‑through information. Grant expenditures and receivables will be reconciled to the general ledger on a monthly basis. Prior to submission to the auditors, the SEFSA be independently reviewed for completeness, accuracy, and compliance with federal and state requirements.

The District's management acknowledges and concurs with the finding regarding the maintenance of documentation for students removed from the graduation cohort. We recognize the importance of strictly adhering to the Elementary and Secondary Education Act (ESEA) requirements to ensure the integrity of the four-year adjusted cohort graduation rate. Following the audit exit conference, District leadership met with staff from the Information Technology (CALPADS team), Educational Services departments and also site staff to discuss the root causes of the missing documentation. The District is committed to strengthening internal controls and ensuring that every student status change is backed by the specific evidentiary standards required by federal and state regulations.

Management agrees and acknowledges the delay in issuing the financial statements. Contributing factors included staffing transitions, adjustments to policies and financial software, and the need for additional time to complete year end reconciliations. The City has since implemented process improvements, earlier preparation of key schedules, and expanded cross training among staff. These actions are expected to support timely completion of future financial reports.

Federal Agency Name: United States Department of Agriculture Program Name: Community Facilities Loans and Grants Cluster Federal Assistance Listing #10.766 Finding Summary: The Organization did not have an adequate internal control policy in place to ensure the reserve account was separately tracked and a documented review and approval over the reserve fund occurred. Responsible Individuals: Sharlene Knutson, Administrator Corrective Action Plan: We have adopted a policy to enhance internal control to ensure the reserve fund reconciliation has a secondary review and approval that is documented. Anticipated Completion Date: 6/30/2026

Personnel Responsible For the Corrective Action: Eric Keith, Director of Finance Anticipated Completion Date September 30, 2026 Corrective Action Plan: The vendor has already updated the financial information page to show the Poverty Scale Base Income and Poverty Scale Increment fields so that a user could see how the automated percentage of poverty is calculated. Corrective actions include that within 60 days, the Corporation will determine the root cause of the error, and will implement procedures to have a back-up person manually check the poverty scales within the system after they are updated each year by the data specialist and the data specialist will randomly sample cases opened each day for the first two weeks after the update to verify the calculations and then again quarterly after that. Within 90 days, the Corporation will review cases that were actually over 125%, or other appropriate poverty level limits, and determine if there is any financial impact and report any adjustments.

Views of responsible officials Omissions in the SEFA maintained during 2025 primarily pertain to construction lending by the City of New York’s Department of Housing Preservation and Development that utilized underlying federal funding. Management inadvertently only presented the construction lending in the years of expenditure. Such expenditures were duly reported upon and audited during the years of expenditures and were maintained within the financial records of Southwest 141 Street Housing Development Fund Company, Inc. but were subsequently omitted from the SEFA in the years following. Management concurs with Finding No. 2025-001 and, as of March 2026, management has enhanced its internal controls and augmented its personnel to ensure that such reporting under Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards is compliant, complete, and accurate for the 2025 SEFA and going forward.

Finding 2025-003 – Special Tests and Provisions (Material Weakness in Internal Control Over Compliance) Planned Corrective Action: Seattle Indian Health Board will implement the following actions to ensure accurate application and documentation of the Sliding Fee Discount Program: - EPIC System Update: Configure EPIC to automatically assign the appropriate sliding fee discount level to patients with zero income to ensure consistent application of the discount schedule. - Required Income Documentation at Intake: Update procedures to require front desk staff to record a patient’s income level at intake for all patients, including a reasonable estimate when documentation in unavailable. This is required for both an accurate sliding fee application and UDS reporting. - Standardized Documentation Requirements: Require retention of supporting documentation for income and family size in the patient record, or documented attestation when estimates are used, in accordance with policy. - Front Desk Training and Accountability: Provide targeted training to front desk and registration staff on sliding fee discount program requirements, with emphasis on proper data entry, documentation standards, and discount application. - Ongoing Monitoring: Implement monthly reviews of a sample of patient accounts to confirm sliding fee discounts are supported, accurately applied, and properly documented. Errors will be corrected and addressed with the staff as needed. Name of Responsible Party: Tempest Dawson, Director of Clinic Operations Anticipated Completion Date: December 31, 2026.

We agree with the finding and we will be reviewing and implementing the recommendations accordingly. We are committed to ensuring no duplication of costs across reporting periods and compliance with allocability requirements under Uniform Guidance on a prospective basis. This corrective action plan will be implemented by June 30, 2026.

Finding ref number: 2025-002 Finding caption: The District did not have adequate internal controls and did not comply with time-and-effort requirements. Name, address, and telephone of District contact person: Elyssa Louderback, Executive Director of Business & Operations, 216 North G Street, Aberdeen, WA. 98520. (360) 538-2007 Corrective action the auditee plans to take in response to the finding: (If the auditee does not concur with the finding, the auditee must list the reasons for non-concurrence). The district will make sure all staff are listed on the Semi-Annual Certifications. Staff with braided funding will have a PAR with monthly verifications. Anticipated date to complete the corrective action: February 1, 2026

Finding 2025-003: Preparation of the schedule of federal expenditures (SEFA) – material weakness in internal controls over reporting. Management Response: Management acknowledges the finding and agrees that improvements are needed in the preparation and review of the Schedule of Expenditures of Federal Awards (SEFA). The audit identified that controls over the accuracy, completeness, and reconciliation of the SEFA to the general ledger and financial statements were not consistently performed or documented. This condition developed during a period of organizational transition, including changes in financial leadership, as well as increased complexity in federal funding and reporting requirements. These factors contributed to gaps in oversight and consistency in the SEFA preparation process. To address this finding, management is implementing the following corrective actions: • Establishing a formal, documented SEFA preparation process, including standardized templates and procedures • Implementing quarterly and year-end reconciliation processes to ensure grant activity is accurately recorded and aligned with the general ledger • Strengthening review controls, including secondary review by the Controller and CFO prior to finalization Enhancing grant tracking mechanisms to ensure expenditures, revenues, and matching requirements are properly classified • Providing targeted training to staff responsible for grant accounting and SEFA preparation Responsible party: Brenda Colon, CFO Expected Completion Date: October 2026

Finding 2025-002: Allowable Costs and Activities – Material Weakness in Internal Controls over Compliance Management Response: Management acknowledges the finding and agrees that improvements are necessary in the design and execution of internal controls related to allowable costs and activities for federal programs. The audit identified inconsistencies in how grant expenditures were reviewed, approved, and supported, as well as gaps in ensuring costs charged to grants were fully aligned with applicable requirements. This condition arose during a period of organizational transition, including changes in financial leadership, combined with increased volume and complexity of federal funding. These factors contributed to inconsistencies in control execution, documentation, and oversight. To address this finding, management is implementing the following corrective actions: • Enhancing policies and procedures governing allowable costs to ensure alignment with federal grant requirements • Strengthening pre- and post-expenditure review processes to verify that all costs charged to grants are allowable, properly supported, and accurately recorded • Implementing formal, documented reconciliation procedures for grant expenditures on a monthly basis • Establishing secondary review controls involving both the Controller and CFO to ensure compliance and accuracy • Providing targeted training to program and finance staff on allowable cost principles and grant compliance requirements • Improving documentation standards to ensure all approvals and supporting evidence are complete and audit-ready. Responsible party: Brenda Colon, CFO Expected Completion Date: October 2026.

Finding 2025-001: Allowable Costs and Activities – Material Weakness in Internal Controls over Compliance Management Response: Management acknowledges the finding and agrees that improvements are required in internal controls over compliance related to allowable costs and activities. This condition arose during a period of organizational transition and increased complexity in funding sources and compliance requirements, which impacted consistency in control execution. Under the direction of the CFO, the organization is implementing the following corrective actions for the upcoming fiscal year: • Strengthening review and approval processes over grant expenditures and payroll allocations • Implementing formal, documented monthly reconciliations for all grant-related accounts • Establishing secondary review controls between the Controller and Accounting Clerk to ensure accuracy and compliance • Providing targeted training under the direction of the CFO for staff involved in financial reporting and grant compliance • Enhancing documentation standards to ensure all control activities are properly evidenced and audit-ready The organization has also reinforced financial leadership capacity to ensure appropriate oversight, adherence to GAAP, and alignment with federal compliance requirements. Responsible party: Brenda Colon, CFO Expected Completion Date: October 2026.

The YWCA has implemented (January 2025) the following changes in its accounting procedures. 1. The Staff Accountant will review the period each expenditure is related to and record the invoice to the appropriate period when entering it into accounts payable. The month and year will be noted on the invoice. 2. The CFO will review the month, and year noted by the Staff Accountant prior to entry into accounts payable.

Federal Agency Name: Department of Housing and Urban Development Program Name: Section 242 – Mortgage Insurance - Hospitals Federal Financial Assistance Listing #: CFDA #14.128 Compliance Requirement: Reporting Finding Summary: The Section 242 – Mortgage Insurance - Hospitals Program requires quarterly reports and certain annual reports. For the year ended July 31, 2025, the Organization failed to timely and accurately submit certain reports in accordance with HUD requirements. Responsible Individuals: Jay Hodges, Chief Financial Officer Corrective Action Plan: Management will enhance internal controls to ensure that required reports under the Section 242 Program are submitted timely and accurately. Anticipated Completion Date: April 29, 2026

Finding 2025-002: Lower Income Housing Assistance Program – Section 8 New Construction/ Substantial Rehabilitation Assistance Listing Number: 14.182 U.S. Department of Housing and Urban Development (Repeat of Finding 2024-003) Compliance Requirements: Special Tests and Provisions Type of finding: Internal Control Over Compliance (material weakness) and Compliance (material noncompliance) Recommendation: The Organization should strengthen its internal controls with adopted policies and procedures to establish a monitoring process to ensure compliance with Mortgage Restructuring Loan terms and conditions. Action Taken: Action Taken: The Organization has accepted the recommendation to strengthen internal controls regarding Mortgage Restructuring Loan terms. We are currently in active remediation, working in direct coordination with our HUD Account Exexuctive, to ensure our adopted policies align with the federal requirments. Our HUD Account Exexuctive, has been notified of the finalized 2025 Auditied financials and are currently working to set up a time to discuss a Management Action Plan regarding a recommedation for Mortgage Restructuring controls. If these are questions regarding this plan, please call the responsible part at (719)852-5578. Sincerely yours, Brenda Quintana Administrator Tri-County Senior Citizens and Housing, Inc.

The Florida School Nutrition Association, Inc. (FSNA) acknowledges the audit finding regarding the misalignment between the pass-through entity’s grant agreement and the OMB Compliance Supplement for ALN 10.185. While the Association operated in accordance with the terms of the executed agreement with the Florida Department of Agriculture and Consumer Services, it was subsequently determined that certain administrative costs permitted under that agreement were not allowable under the Uniform Guidance (2 CFR Part 200). Finding 2025-001: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Upon identification of this discrepancy, FSNA has taken immediate and decisive action: Program Termination & Strategic Shift: FSNA has formally concluded its participation in the Local Food for Schools Cooperative Agreement Program and has ceased all related activities. The Association has made the strategic decision not to pursue or engage in federal grant programs of this nature moving forward. This determination ensures alignment with the organization’s operational capacity and mitigates compliance risk associated with complex federal cost principles. Final Resolution: The identified material weakness has been addressed through the discontinuation of the applicable program, thereby removing the operational conditions under which the noncompliance occurred. Future Funding Consideration (If Applicable): While FSNA does not anticipate pursuing similar federal awards, the organization has established an internal standard that any future funding opportunities, if considered, will undergo a comprehensive compliance review to ensure alignment with the Uniform Guidance (2 CFR Part 200), the OMB Compliance Supplement, and all grantspecific terms and conditions. Record Retention: FSNA will maintain all financial and supporting documentation related to the FY25 audit period in accordance with applicable federal record retention requirements.