Corrective Action Plans

2023-003 Compliance of Special Tests and Provisions – National Service Criminal History Checks: Management Response: Management will ensure an individual who does not perform the adjudication will review and document whether information was entered correctly and whether the adjudications are proper and documented prior to a member’s start date. Responsible Person: Lisa Moore, Executive Director Anticipated Remediation Date: Fiscal year ending August 31, 2024

2023-003 – Period of Performance Recommendation: We recommend that PPS enhance its procedures and internal controls to ensure that expenditures are not charged to federal awards during the period of performance. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The Office of Special Education and Related services and the Portsmouth Finance department will monitor expenditures on an ongoing basis to ensure the funds are spent in accordance with the period of performance of the grant. The Finance department will review all purchases and notify the Office of Special Education if purchases are unallowable and do not follow the period of performance and have alternate suggestions on how the purchase can be made. Name(s) of the contact person(s) responsible for corrective action: Pamela Battle-Hardy, Director of Special Education and Related Services Planned completion date for corrective action plan: January 1, 2025

Views of Responsible Officials: Beginning with the FY2023, Hope for Prisoners’ CEO reviews and approves all RFR forms in writing prior to submission. Oversight by specific board members will be provided through a review of the submitted RFR to compare it to the monthly financial reports already being provided.

Planned Corrective Action: To ensure grant funds are not utilized prior to final approval, grant application documents will be submitted to DESE by August 15th to ensure approval is given prior to costs being incurred. Additionally, we will identify alternative funding sources in the event grant approval is delayed and costs must be incurred.

We understand the auditor’s comments and the following action has been taken to resolve the situation. Procedures have been developed and implemented to ensure that grant draw requests are prepared, reviewed and submitted on a timely basis in accordance with the grant agreements.

Management concurs. The City will strengthen its policies and procedures related to federal award reporting to comply with reporting requirements.

Condition: A duplicate expense was recorded to the program and expenses were recorded to the program prior to the period of performance. Planned Corrective Action: Management acknowledges noncompliance in the current fiscal year and has taken measures to improve internal controls over compliance. Management has instituted procedures to provide a review of journal entries to reclass expenses to grant funded programs and promptly record. As well, Finance staff have been added to oversee the accounting function for the grant. Contact person responsible for corrective action: Mary Lawrence, Director of Financial Analysis and Special Initiatives Anticipated Completion Date: 5/15/2024

Name of Responsible Individual: Tyler Hosey, Senior Accountant Corrective Action: The University acknowledges that the allowable indirect costs reimbursed to the University from the NASA federal grant funds was not calculated correctly for fiscal year 2023. In recent years the University has applied for a quarterly no cost extension of the previously used indirect cost rate for federal grant purposes. In March of 2024 the University actively pursued a contract with a firm known as Point Consulting to help reevaluate the currently used in direct cost rate for the University. Pont consulting has been contracted by the university in past years, but the percentage has been simply rolled forward and not adjusted. Going forward the University plans to reevaluate the indirect cost percentage in accordance with federal guidelines. The accounting department will work directly with the Challenger Learning center to make sure that indirect funds are calculated correctly and drawn down in timely and accurate manner. Anticipated Completion Date: July 2024

Finding 2023-001 – Internal Control Deficiency Over Activities Allowed or Unallowed and Activities Allowed/Allowable Costs Federal Grantor: Department of Homeland Security; Federal Emergency Management Agency (FEMA) Assistance Listing No.: 97.036, Disaster Grants – Public Assistance (Presidentially Declared Disasters) Award Period of Performance: January 20, 2020 – May 11, 2023 Finding: Management did not consistently retain documentation evidencing the performance of controls to ensure allowable COVID-19 expenses were charged to the program. Corrective Action Plan: All of these deficiencies were related to the selections being more than 36 months old, which is past the current documentation retention policy of PVHMC for non-controlled substances and non-patient records. In order to ensure that documentation is retained for future audits, all FEMA related documentation that is still retained will be kept indefinitely to ensure compliance in future years. Person Responsible: Juli Hester, Chief Financial Officer Estimated Completion Date: May 31, 2024

The Northeast Texas Public Health District (NET Health) will take steps to ensure overall effective grant monitoring and to increase communications between NET Health Grant Managers and the Chief Financial Officer and Chief Executive Officer. The NET Health Leadership Team will discuss any issues during our weekly Leadership Team meetings to ensure compliance. These weekly meetings will address costs expended within the grant parameters and ensure grant funds will be more evenly expended during the year as appropriate. NET Heatlh will continue to develop effective methods of grant oversight as it finds weaknesses in its processes. To ensure compliance with the period of performance requirements, NET Health will change its processes effectively immediately. Going forward checks will only be prepared, dated, signed, and mailed to vendors after work is completed or items are received. There will be enhanced internal controls by establishing procedures to monitor and ensure timely payment of accrued expenditures, such as regularly accounting for any outstanding checks and actively communicating with vendors on performance requirements. In addition, we will enhance communication and coordination among relevant departments to expedite the payment process while maintaining compliance with grant regulations. George T. Roberts, CEO, and Lawanda Owens, CFO, are the persons responsible for this action plan going forward. NET Health is expected to have this action plan implemented by May 1, 2024.

As of January 2, 2024 CAL, hired a staff account (Melanie Richards) to ensure all expenses are recorded in compliance with performance periods. The Associate Director of Finance will review all postings monthly and consult with the Vice President of Finance on any corrections or recommendations.

Finding: The Department of Children, Youth, and Families did not have adequate internal controls over and did not comply with health and safety requirements for the Child Care and Development Fund program. Questioned Costs: Assistance Listing # 93.575 93.575 COVID-19 93.596 Amount $0 Status: Corrective action in progress Corrective Action: The Department is strongly committed to ensuring the health, safety, and well-being of all children in care. The Department concurs with the finding and has taken the following actions: • In the fall of 2022, the Department began recruiting new staff to address staff turnover issues and providing training on child care licensing rules and regulations. • In November 2022, added new positions to assist supervisors with onboarding and training new staff and focused training on monitoring visits, caseload management, and health and safety requirements. • Implemented a data driven, phased in approach, to return staff to in-person field work after the COVID-19 pandemic: o In July 2022, implemented return to in-person field work by reducing pandemic level requirements and authorizing staff to visit providers on-site to assist with meeting health and safety requirements. o In February 2023, developed and implemented a field practice onboarding process to streamline training for newly hired staff on practices to support the annual monitoring of all licensed child care providers. o In the spring of 2023, prioritized monitoring visits to return to compliance with Child Care and Development Fund program health and safety requirements. • Conducted a root cause analysis to determine other underlying causes for missed monitoring visits and untimely follow-ups, and how to address them. • For license-exempt family, friend, and neighbor (FFN) providers, the Department: o Received approval from the Office of Child Care for a hybrid monitoring approach (in-person and virtual visits). o Dedicated staff resources to update the WA Compass system to include all health and safety requirements for FFNs and address data format issues. Completion Date: Agency Contact: The Department will continue to strengthen internal controls as follows: For licensed providers: • Create in-training licensing positions to assist with staff recruitment efforts. • Continue to track and monitor health and safety requirements with available tools until all WA Compass system development is completed. • Examine ways to secure resources to add additional full-time staff to support caseload needs. For FFN providers: • Continue to track and monitor FFN health and safety requirements with available tools until all WA Compass system development is completed. The conditions noted in this finding were previously reported in findings 2022-045, 2021-039, 2020-042, 2019-039, 2018-035, 2017-025, 2016-022 and 2015-024. Estimated July 2025 Stefanie Niemela Audit Liaison PO Box 40970 Olympia, WA 98504-0970 (360) 725-4402 stefanie.niemela@dcyf.wa.gov

Finding: The Health Care Authority did not have adequate internal controls to ensure payments to providers for the Block Grants for Prevention and Treatment of Substance Abuse program were allowable and met period of performance requirements. Questioned Costs: Assistance Listing # 93.959 93.959 COVID-19 Amount $3,447,346 Status: Corrective action not taken Corrective Action: The Authority does not concur with the finding. The Authority maintains that its internal controls are effective, and procedures are compliant with grant requirements. No corrective action will be implemented. The costs questioned by the auditor do not reflect funds that have been paid or drawn from the grantor. As a result, there are no funds to return to the grantor. The conditions noted in this finding were previously reported in findings 2022-067, 2021-057, and 2020-059. Completion Date: Not applicable Agency Contact: William Sogge, CPA, CIA External Audit Liaison PO Box 45502 Olympia, WA 98504-5502 (360) 725-5110 william.sogge@hca.wa.gov

Finding: The Department of Social and Health Services did not have adequate internal controls to ensure individuals are eligible to receive benefits for the Money Follows the Person program. Questioned Costs: Assistance Listing # 93.791 Amount $0 Status: Corrective action complete Corrective Action: The Department partially agrees with the finding. The Department agrees that the Financial and Social Services Communication (14-443) forms were not provided to terminate the enrollment of the four exceptions identified in the finding. However, in those exceptions, the Roads to Community Living (RCL) disenrollment communication was made in accordance with the existing Nursing Facility Case Management policy as defined in Chapter 10 of the Long-Term Care (LTC) Manual. In addition, all clients met eligibility criteria for RCL services or were converted to another Home and Community Based program within the 365-day RCL demonstration year limitation. In these cases, the client was converted to a state plan or waiver with the new program start date noted on the 14-443 forms. The 14-443 form is a communication tool used by the Department’s public benefit specialists. For Modified Adjusted Gross Income (MAGI) enrolled Medicaid participants, benefits are managed by the Washington State Health Care Authority and the 14-443 form is not required or used by the Department’s public benefit specialists. This MAGI beneficiary communication detail was not articulated in the RCL chapter of the LTC Manual. As of May 2024, the Department updated Chapter 29 of the LTC Manual to clarify instructions related to when the 14-443 form must be completed for MAGI participants and what needs to be included on the form when it is required. Completion Date: May 2024 Agency Contact: Richard Meyer External Audit Compliance Manager PO Box 45804 Olympia, WA 98504-5804 (360) 664-6027 Richard.Meyer@dshs.wa.gov

Finding: The Health Care Authority did not have adequate internal controls over and did not comply with federal provider eligibility requirements for the Medicaid and Children’s Health Insurance Program. Questioned Costs: Assistance Listing # 93.767 93.767 COVID 93.775 93.777 93.777 COVID 93.778 93.778 COVID Amount $0 Status: Corrective action in progress Corrective Action: The Authority partially concurs with the finding. The Authority does not concur that four providers did not receive a proper license check, nor that the backdated provider was noncompliant with regulations prior to receiving a National Provider Identifier (NPI). When a provider’s license expires, the Authority enters an end date for the provider taxonomy to prevent future payments. The Authority does not pay claims without an NPI and this is compliant with federal requirements. Corrective action has been in process to address revalidation issues. As of January 1, 2024, the Authority implemented a system change moving the revalidation date to 90 days before the end of the five-year period. The Authority is developing additional procedures to strengthen internal controls over provider enrollment. The conditions noted in this finding were previously reported in findings 2022-055, 2021-047, 2020-046, 2019-048, 2018-042, 2017-033, and 2016-035. Completion Date: Estimated December 2024 Agency Contact: William Sogge, CPA, CIA External Audit Liaison PO Box 45502 Olympia, WA 98504-5502 (360) 725-5110 william.sogge@hca.wa.gov

Finding: The Department of Children, Youth, and Families did not have adequate internal controls over and did not comply with requirements to ensure payments to providers were allowable and properly supported for the Social Services Block Grant. Questioned Costs: Assistance Listing # 93.667 Amount $8,518,020 Status: Corrective action in progress Corrective Action: The Department maintains that funds were not improperly charged to the Social Services Block Grant (SSBG) program. The Department utilizes grant-level management for all federal funds, including the SSBG program. This process consists of making grant-level adjustments between allowable grant sources to properly spend grant funds within the allowable period of performance and ensure level of effort and matching requirements are met. The Department allocated the SSBG funds to eligible clients and allowable activities in compliance with 45 CFR 98.67 but did not include the level of data recommended by the State Auditor’s Office (SAO) for some transfers. Cost objectives within the accounting system are used to track SSBG funding. Expenditures eligible for the SSBG program are transferred at the cost objective level and not the transaction level. The SAO tested a sample of 16,006 payments which totaled 94% of total provider payments charged to the grant. SAO found that all payments were for activities that were supported, allowable, authorized, and accurate. SAO is questioning the costs of the remaining payments because the transfer of expenditures was not completed at the transaction level. Those remaining payments were transferred from eligible and allowable expenditures for the SSBG program. The Department is committed to collaborating with SAO to determine an appropriate methodology which identifies a sampling unit that can be used to accurately test compliance. In response to the auditor’s recommendations, the Department will develop and maintain a business process that would allow adjustments to include transaction level data. Completion Date: Agency Contact: Estimated December 2025 Stefanie Niemela Audit Liaison PO Box 40970 Olympia, WA 98504-0970 (360) 725-4402 stefanie.niemela@dcyf.wa.gov

Finding: The Department of Children, Youth, and Families did not have adequate internal controls to ensure group care facility employees and adults residing in prospective caregivers’ households had cleared background checks before having unsupervised access to children. Questioned Costs: Assistance Listing # 93.658 93.658 COVID-19 Amount $0 Status: Corrective action complete Corrective Action: The Department partially concurs with the finding. The auditors identified two exceptions where fingerprint checks for two family foster home adults were completed two days later than the required timeline of 15 calendar days. The delay was due to the misspelling of one applicant’s last name in the system. Upon correction, the applicants subsequently completed the fingerprint checks and were determined eligible. As stated in the finding’s Cause of Condition, the Department developed a corrective action plan to address the internal control deficiencies in response to the prior year’s finding which had not been fully implemented within the current audit period. The Department is confident that all staff who work with children and youth have cleared background checks. As of April 1, 2023, the Department implemented a new process for processing background checks for group care facilities to strengthen internal controls, documentation, and clarification on the “effective date.” The updated process is outlined below: • A new form was created with clear instructions for the group care facilities to provide the applicant/employee information, including the background check confirmation code, directly to the Department’s Background Check Unit (BCU). • The BCU works with the applicant/employee through the fingerprint background check process. • The results are sent directly to the BCU, at which time they complete a child abuse/neglect history check and if needed a suitability assessment. The BCU documents the results in FamLink with the date the background check is completed. • The BCU emails the results to the group care facility and the Department’s Licensing Division (LD) group. If the applicant/employee is cleared and is not a renewal, LD staff adds the applicant/employee to the group care facility in FamLink with the clearance information attached. The conditions noted in this finding were previously reported in finding 2022-050. Completion Date: April 2023 Agency Contact: Stefanie Niemela Audit Liaison PO Box 40970 Olympia, WA 98504-0970 (360) 725-4402 stefanie.niemela@dcyf.wa.gov

Finding: The Department of Health did not have adequate internal controls to ensure payments to subrecipients were allowable, met cost principles, and were within the period of performance for the Immunization Cooperative Agreements program. Questioned Costs: Assistance Listing # 93.268 93.268 COVID-19 Amount $416,027 Status: Corrective action not taken Corrective Action: The Department does not concur with the finding. The Department disagrees with the State Auditor’s Office (SAO) assessment of a material weakness in internal controls over the consolidated contract provider payment process for the Immunizations Cooperative Agreements program. The level of documentation received from the subrecipient accounting system provided assurance that the exceptions questioned by SAO met federal cost principles for allowability and period of performance. The Department has established processes in place to ensure payments are allowable and meet cost principles for the program. These include: • Program staff maintain detailed budget information for each subrecipient by project area, and as A-19s are submitted, program and accounting staff update budget spreadsheets. When reviewing the support provided by the subrecipient, staff ensure amounts submitted by project are reasonable and align with expectations for the budget period submitted. • Program staff refer to the federal Immunization Program Operations Manual to determine procedures related to allowable costs, purchases, and procurement. • The Fiscal Monitoring Unit provides technical assistance and training to program staff and subrecipients while onsite and at the request of the entities receiving funding. • Program staff provides policy guidance, technical assistance, and training to subrecipients related to program compliance requirements. The program has continued to strengthen processes to ensure supporting documentation aligns with the agency’s documentation matrix for subrecipients in accordance with assigned risk level. The Department is planning on meeting with federal grantors to work through the exceptions and questioned costs identified in the finding. The conditions noted in this finding were previously reported in finding 2022-031. Completion Date: Not applicable Agency Contact: Jeff Arbuckle External Audit Manager PO Box 47890 Olympia, WA 98504-7890 (360) 701-0798 Jeff.Arbuckle@doh.wa.gov

Finding: The Office of Financial Management did not have adequate internal controls over and did not comply with reporting requirements for the Coronavirus State and Local Fiscal Recovery Funds. Questioned Costs: Assistance Listing # 21.027 COVID-19 Amount $0 Status: Corrective action complete Corrective Action: The Office has continued to strengthen internal controls for the Coronavirus State and Local Fiscal Recovery Fund (SLFRF) reporting to ensure compliance with the federal requirements. The Office will continue to: • Monitor updates to the U.S Treasury’s Project and Expenditure Report User Guide. • Improve the quarterly reporting template and assist state agencies during the reporting process. • Communicate with agencies to remind them of the requirement to maintain adequate supporting documentation for all reports, including quarterly reported obligations. • Ensure reported amounts, including corrections or adjustments made during the reporting period, are properly tracked and documented for the subsequent reporting cycles. • Perform reconciliations of reported expenditures to ensure agency expenditures are accurately reported, allowing for adjustments/ corrections required due to issues with the reporting system. • Ensure reported expenditures and supporting accounting records are adequately reviewed by management before the information is uploaded to the federal reporting system. • Document correspondences with the U.S. Treasury when system errors are identified and resolutions recommended by the grantor, if received. The conditions noted in this finding were previously reported in finding 2022-020. Completion Date: January 2024 Agency Contact: Sara Rupe Deputy Statewide Accounting Director PO Box 43127 Olympia, WA 98504-3127 (360) 974-9252 sara.rupe@ofm.wa.gov

Finding: The Department of Social and Health Services did not have adequate internal controls over and did not comply with requirements for monitoring subrecipients to ensure payments were allowable, properly supported and met period of performance requirements for the Coronavirus State and Local Fiscal Recovery Funds. Questioned Costs: Assistance Listing # 21.027 COVID-19 Amount $312,659,850 Status: Corrective action in progress Corrective Action: The Department partially concurs with the finding. The Department’s Office of Refugee and Immigrant Assistance (ORIA) administered this funding through the Washington COVID-19 Immigrant Relief Fund program and contracted with a subrecipient organization to conduct eligibility determinations to approve and disburse funds to undocumented immigrants. This program is now closed, with all subrecipient contracts ended and the final payments sent in early 2023. The Department is taking action to strengthen internal controls over subrecipient monitoring for ORIA’s contracts. By July 2024, the Department will: • Complete a review of all active contracts utilizing federal funding to ensure subrecipients are accurately identified. • Explore the feasibility of increasing ORIA and Economic Services Administration accounting staff resources to support the workload increase associated with monitoring subrecipients. By October 2024, the Department will convene a work group with contracts and accounting staff to create effective internal controls and written procedures for fiscal and program monitoring of ORIA’s subrecipient contracts. This will include the following: • Verify the subrecipient status for each contract is correctly determined and recorded in the Agency Contracts Database. • Include the required subrecipient language in the contract. • Obtain a copy of the indirect rate certification or cost allocation plan from the subrecipient. • Complete risk assessments. • Create appropriate monitoring plans for each subrecipient. • Conduct fiscal monitoring of each subrecipient to obtain assurance that the use of federal funds complies with federal laws and regulations. • Create corrective action plans when required. By January 2025, the Department will ensure all ORIA program staff responsible for monitoring receive training on the updated procedures. In addition, the Office of the Secretary will request the Department’s Internal Audit and Consultation office conduct an internal audit of ORIA to ensure the program implements strong internal controls, properly accounts for federal funds, and materially complies with federal requirements. The Department does not concur with the questioned costs. The funds were used to assist Washington workers/families who were affected by the COVID-19 pandemic but were unable to access federal stimulus programs and other social support due to their immigration status. Repayment of these funds would only hinder the state’s ability to provide critical services to our clients. If the grantor contacts the Department regarding the questioned costs, the Department will discuss this with the Department of Health & Human Services and will take additional action as appropriate. Completion Date: Estimated January 2025 Agency Contact: Richard Meyer External Audit Compliance Manager PO Box 45804 Olympia, WA 98504-5804 (360) 664-6027 Richard.Meyer@dshs.wa.gov

Identifying Number: 2023-001 Finding: Swope Health Services and Subsidiaries expended federal funding on an invoice with a service period outside of the Period of Availability for Period 5 of the Provider Relief Fund. Corrective Actions Taken or Planned: Management will evaluate and alter the accounts payable invoice review process as necessary to mitigate the risk of inaccurate recording of prepaid expenditures, as was the case in this finding. Management will consider the need to reorganize the assignment of duties as they pertain to the processing and review of invoices and vendor payments to ensure a sufficient level of review of material transactions to ensure accurate accounting of vendor payments. Person Responsible: Naimish Patel, CFO Anticipated Completion Date: Plan to be completed by December 31, 2024

Federal Agency Name: Department of Health and Human Services Program Name: Block Grants for Community Mental Health Services CFDA # 93.958 Finding Summary: There was no formal documentation of review and approval of wage rates prior to the submission of the reimbursement request to SAMHSA for three months selected for testing. Responsible Individuals: Mohamed Omar, MBA, MS, Chief Administrative Officer and Mark Copps, Finance Director / Controller Corrective Action Plan: During 2023, management implemented a formal documentation of the review including the appropriate level of management sign off and date of review on the supporting documentation. Anticipated Completion Date: October 2023

Finding: 2023-047 - DPA obligated more than 10 percent of the FFY 22 grant award during the second fiscal year of the award. Questioned Costs: None Assistance Listing Number: 93.568 Assistance Listing Title: LIHEAP Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): DOH agrees with the finding. Corrective Action (corrective action planned): The Division of Public Assistance (DPA) expanded administrative personnel to enhance oversight and compliance. A comprehensive staff training plan will ensure understanding and adherence to compliance measures. Completion Date (list anticipated completion date): DOH anticipates the finding will be resolved in FY2025. Agency Contact (name of person responsible for corrective action): Josie Stern, Assistant Commissioner

The questioned costs were immaterial and relate to a pay period that was split across the fiscal year (6/27/22 to 7/8/22, with a pay date of 7/15/22). Reports to the funder for the year ending 6/30/22 were due on 7/10/22, before all payroll information and supporting documentation for this pay period was available. Therefore, the full pay period was included in the July reimbursement report. This practice was approved by the funder. Moving forward, the organization will be more cognizant of accrual dates for payroll reporting and submit a true-up as needed to ensure that payroll costs are correctly allocated at the end of the fiscal year. Additionally, in May 2024, the organization will be implementing a new electronic payroll system that will allow us to obtain this information more quickly at the close of each fiscal year to complete billing reports.

2023-018 Oregon Housing and Community Services Ensure grant management report control is performed and documented MANAGEMENT RESPONSE: We agree with this recommendation. A dedicated staff resource has been trained and has brought grant reconciliations and reporting current. Additional training has been provided for awareness of the earmarking and obligation requirements as well. Anticipated Completion Date: June 30, 2024 Contact person: Dean Criscola, Controller