Corrective Action Plans

Finding No.: 2021-024 AL Program: 17.225 - Unemployment Insurance Area: Eligibility Questioned Costs: $1,131,117 Contact Person(s): Zachary Taitano, PUA Program Manager, DOL Corrective Action Plan: Condition 1: CNMI DOL agrees with audit findings for Condition 1 for all three Application IDs indicated, as upon further review, Social Security Cards were not on file for claims identified. However, per the Benefits Rights Information (BRI) Handbook, and PL 116-136 CARES Act, claimants were only required to provide their full social security number. For each claim, the full SSN of claimant is provided and self-certified, on both the Initial Application and in each Weekly Certification. Condition 2: CNMI DOL agrees with this finding. Notably, this issue was identified and addressed through Fiscal Year 2020’s Single Audit. OPC 590093 was initiated on July 31, 2020 to send a Letter of Determination via the HireMarianas Portal’s internal messaging system. Moreover, the OPC also requested for all future payments that a Letter of Determination be issued once a payment is generated per user. Condition 3: CNMI DOL agrees with this finding, with respect to the SAVE Verification being necessary. However, upon further examination: Application ID 398353: The applicant has a SAVE verification response uploaded to their HireMarianas Portal dated 05/23/2022. Moreover, upon a further review of the USCIS-SAVE Database, the other Application IDs identified did not have a SAVE Verification initiated upon initial clearance. CNMI DOL has initiated a SAVE Verification for the remaining 3 users. The results are as follows: Application ID 158179: This applicant is a Green Card holder and the SAVE response was returned immediately. A copy of the SAVE verification response for this user was uploaded to the applicant’s HireMarianas Portal on June 24, 2024. A Green Card holder meets the definition of a qualified alien. Application ID 111798: This applicant is a CW-1 VISA holder. A SAVE verification was initiated on June 24, 2024 with the WAC Number indicated on the I-797A (Notice of Action) Form for the relevant period in time. A response was returned on July 5, 2024 stating that the applicant is employment authorized. Application ID 399118: This applicant is a CW-1 VISA holder. A SAVE verification was initiated on June 24, 2024 with the WAC Number indicated on the I-797A (Notice of Action) Form for the relevant period in time. A response was returned on July 5, 2024 stating that the applicant is employment authorized. While CNMI DOL agrees with the fact that SAVE Verification was necessary prior to payment disbursement, it is important to note that all the indicated applicants were indeed qualified aliens per the PUA Program Guidelines   This issue was identified and addressed through Fiscal Year 2020’s Single Audit. OPC 590093 was initiated on July 31, 2020 to send a Letter of Determination via the HireMarianas Portal’s internal messaging system. Moreover, the OPC also requested for all future payments that a Letter of Determination be issued once a payment is generated per user. Condition 4: CNMI DOL agrees with this finding. Upon additional review of the current overpayment log, the Department was able to recollect a total of $19,354.17 from the applicants that were noted in the initial listing provided to the auditors. This leaves the updated remaining overpayment balance for FY 2021 at $1,128,975.35. Auditors were provided with the documentation to substantiate this on 06/24/2024. Recollection efforts are Ongoing. Proposed Completion Date: Ongoing

Management acknowledges the findings and has implemented a corrective action plan to enhance compliance with Federal awards. This plan includes developing Standard Operating Procedures (SOPs) for grant management activities, identifying and documenting existing internal controls, and maintaining constant communication with stakeholders to prevent material noncompliance. Additionally, PREPA will provide training to staff on the new SOPs and establish a monitoring mechanism to continuously assess and improve the effectiveness of these controls. The corrective action plan, supervised by Mr. Ezequiel Nieves from the PREPA Disaster Funding Management Office, is expected to be completed by July 2025. Management is committed to addressing deficiencies, ensuring that processes and controls are robust and effective, and that Federal awards are managed transparently and in full compliance with all regulatory requirements. Effective June 1, 2021, the Authority transitioned the management and operation of its transmission and distribution network as well as certain back- office functions, including billing, collections and accounting, to a third party. The third-party operator is reviewing operating procedures and controls within its responsibilities to make the necessary improvements. Management will work to address these findings with the assistance of the third-party operators, where applicable. Also, effective July 1, 2023, the Authority transitioned the management and operation of its generation assets as well as certain back- office functions to a third party. The thirdparty operator is reviewing operating procedures and controls within its responsibilities to make the necessary improvements. In addition, the Authority will also be implementing and monitoring corrective actions taken by the new generation segment operator. Contact Name Responsible for Corrective Action Plan - Ezequiel Nieves Estimated Completion Date - July 2025

Finding 2021-006: Subrecipient Monitoring Federal Programs: Research and Development Cluster: Stem +C Cause: AAPT's internal policies and procedures governing risk assessment on subrecipient was not performed. Views of Responsible Officials and Planned Corrective Actions: Management will continue to perform risk assessment procedures and will thoroughly document the processes and evaluations. Anticipated Completion Date: December 17, 2021 Responsible Official: Michael Brosnan CFO

Invoices that are received will be scanned to “invoices”. This will direct them to our electronic software, Docuware. The item will then be forwarded to the appropriate Program Director for approval, and they will indicate the appropriate cost centers / allocations. Bookers will then review the approved coding and entered fiscal software. If there is a question or concern about approved coding by the bookkeeper they will speak with Director of Finance, Ethan Terrio. Once invoices are entered into fiscal software, checks will be printed. The check stub and invoice will be attached to each other and filed in the fiscal department.Paper documents will continue to be maintained in fiscal until we go 100% paperless, then all documents will be stored in Docuware.

County Judge/Executive’s Response: The Fiscal Court has contracted with Compass to ensure are compliant.

The County will establish policies and procedures to create better communication between the Emergency Manager and the County Officers.

The County will establish policies and procedures to create better communication between the Emergency Manager and the County Officers.

The County will establish policies and procedures to create better communication between the Emergency Manager and the County Officers.

2021-004 Charges to cost pools that are allocated wholly or partially to Federal awards Management Response: The Tribe has indirect cost agreements through 12.31.2024 and will book the indirect cost according to the rate for audited fiscal years going forward Anticipated Completion Date: 12/31/2024 Responsible Party: Treasurer, Comptroller, Accounting Manager and Federal Programs Accounting Manager

2021-003 Costs must be adequately documented Management Response: The Tribe recently went through administrative changes and we now have a Finance Department that will ensure we address this concern and correct it in a timely manner. We will revisit our current controls and use updated technology to improve our processes. Anticipated Completion Date: 12/31/2024 Responsible Party: Treasurer, Comptroller, Accounting Manager and Federal Programs Accounting Manager

Use of Budgeted Versus Actual Costs for Reimbursements Condition: The Organization made drawdowns after month-end based on budgeted period expenses rather than actual salary expenses to support the amounts being requested for reimbursement. Corrective Action Planned: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The Organization has reviewed and updated its grant drawdown procedures to included only actual cost and for the request to be reviewed and approved by someone other than the preparer prior to submission. The corrective action for this finding has been approved and implemented by the Organization. Person Responsible for Corrective Action: Robert Thompson, Chief Executive Officer Anticipated Completion Date: Implemented

National Park Service Conservation, Protection, outreach, and Education – Assistance Listing No. 15.954 and Research and Development Cluster – Assistance Listing No. 15.608 and 15.945 Recommendation: We recommend management incorporate review control procedures to ensure all costs are approved, within the period of performance, and charged in accordance with UG. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: During the course of the FY21 Audit TAS was informed that a small number of expenses billed to federal agreements fell just outside the Period of Performance. TAS works annually to ensure that agreements requiring additional work or funding are submitted for modification. During the course of preparing some of these modifications and/or new agreements and submitting them to the federal partners, the process of ensuring that period of performance dates didn’t result in gaps in work for staff assigned was not properly evaluated. Consequently, in order to keep staff actively employed and compensated, some dates were not included in the Period of Performance of stated agreements, causing TAS to fall out of compliance for commencement of work on modifications or new agreements within the approved timeframes. TAS now closely reviews Period of Performance dates in new agreements and/or modifications to ensure we remain in compliance with the approved timeframes while eliminating gaps in work for staff assigned to said agreements.. Name(s) of the contact person(s) responsible for corrective action: Kim Lopez, Director of Finance & Operations, Erin Zylstra, Quantitative Ecologist Planned completion date for corrective action plan: COMPLETED

2021–005 Period of Performance Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Health Center Program Cluster Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number and Year: H8ECS37958 Award Period: May 1, 2020 through May 31, 2021 Type of Finding: • Material Weakness in Internal Control over Compliance • Other Matters (Modified Opinion) Criteria or specific requirement: According to § 75.302 Financial management and standards for financial management systems of 45 CFR Part 75, the non-federal entity’s financial management systems, including records documenting compliance with federal statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions. Further, the financial management system of each non-federal entity must provide accurate, current, and complete disclosure of the financial results of each federal award or program in accordance with the reporting requirements. According to § 75.303 Internal controls of 45 CFR Part 75, the 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. Condition: CLA was unable to verify if the Family Practice is in compliance with period of performance. Questioned costs: Unknown Context: During our review expenditures for period of performance we noted expenditures were not supported by adequate records and documentation to facilitate testing. Recommendation: We recommend the Family Practice design controls and procedures to ensure the documentation and records required to identify expenses and the date incurred are properly maintained in the files of the Family Practice. Cause: Management oversight. The Family Practice lacked established internal controls and procedures over financial grant management to ensure supporting records and documentation are properly maintained in the files of the Family Practice. Effect: Inability to support compliance with the grant and a potential loss of federal funding. Recommendation: We recommend the Family Practice design controls and procedures to ensure documentation is properly maintained in the files of Family Practice. Views of responsible officials: There is no disagreement with the audit finding.

We agree with the auditors' comments, and the following action will be taken to improve the situation. We have adjusted the Organization’s Accounting Policies & Procedure Manual to include a detailed review of the General Ledger detail supporting each draw request. Accounting personnel will ensure the Organization’s General Ledger specifically details the month of rent and utility allowance being provided so eligible costs are clearly delineated. Someone other than the preparer will perform a review of each drawdown request to ensure that costs are not being drawn down prior to the operating start date of each individual grant. This issue was discussed with HUD in March 2024 at which time procedural changes were implemented. Effective March 2024 the preparer is required to include the month of rent and utility allowance being provided in the General Ledger detail. A review of the General Ledger detail supporting each draw request will be performed by someone other than the preparer to ensure that costs are not being drawn down prior to the operating start date of each individual grant.

1. Processes related to the program stating roles of each individual involved in the process were documented and implemented in September 2022. 2. Regular risk assessment and monitoring functions are performed by management and grant awarders.

Finding Reference Number: SA 2021-006 Timely Reporting and Return of Unspent Grant Advance AL Number: 21.019 Assistance Listing Title: COVID-19 – Coronavirus Relief Fund Federal Agency: Department of Treasury Pass Through Entity: Yolo County, California Department of Finance Federal Award Identification Number: Unavailable (Yolo County) and 607 (California Department of Finance) • Fiscal Year of Initial Finding: 2021 • Name(s) of the contact person: Kelly Stachowicz, Assistant City Manager • Corrective Action Plan: City notified Yolo County of unspent funds in January 2021. City returned unspent funds to Yolo County in January ($222) and March ($27,617) of 2021, with reporting submitted to County in March of 2021. For future short-notice and unexpected grants provided to the City, the City will designate a lead staff person with bandwidth to manage said grant and clarify timelines with the granting agency. • Anticipated Completion Date: Completed in March 2021.

Management will work together to design and implement a system of internal controls to ensure compliance with all applicable grant requirements.

Management will work together to design and implement procedures to address county wide controls over federal programs and to ensure compliance with grant agreements.

21.019 Noncompliance with Activities Allowed or Unallowed and Allowable Costs/Cost Principles Requirements - Coronavirus Relief Fund The Cleveland County Board of County Commissioners (BOCC) will implement policies and procedures to ensure compliance with applicable grant requirements. Specifically, the BOCC will ensure grant funds are expended on allowed costs as set forth by the grant. Anticipated Completion Date: On Going April 2021 Responsible Contact Person: Rod Cleveland,Chairman BOCC

The Board of County Commissioners will work with all Count Officials to go over all grants and federal monies that the County receives to ensure that proper internal controls are implemented.

We will work to implement a risk assessment plan. We will implement controls to help make sure we are m compliance with all grant requirements and federal funds are expended in accordance with grant agreements and in a timely manner. We will ensure employees have the current and correct compliance supplement to work from.

Findings: Activities Allowed or Unallowed- Internal Controls that were designed to ensure that JAG program related expenses were actually incurred were ineffective in certain circumstances. Status: Resolved. Corrective Action: DSAL has removed all ineligible expenses from the ACSO-JAG grants accounts.

As part of the system of internal control over wire transfers, there will be segregation of duties with one person initiating the wire transfer and a second person reviewing and approving the wire transfer. A third person should then prepare timely bank reconciliations to reconcile all wire transfers. This would ensure that all wire transfers were proper and being sent to known vendors of Friend Health.

Friend Health has implemented quarterly audits on all new staff to verify each new staff member hired within the last year has a signed employee offer and appropriate backup support to support the employees’ annual salary. Friend Health has implemented a new accounting system Sage Intacct. Additionally, we have implemented a grants project tracking module to better help with grants and contracts reporting and compliance. Friend Health is in the process of implementing a new payroll & HRIS – UKG. The anticipated completion date is June 2024. All manual and onboarding processes will be implemented within the system for tracking and auditing purposes. Friend Health will implement an established monthend checklist for all monthly entries to be completed by assigned finance staff. We will ensure that all staff are trained adequately to handle any assigned task. All monthly entries are required reviewed and approved by the Chief Financial Officer or Controller prior to posting to the general ledger within our new Accounting Software. All appropriate backup documentation will be saved and stored within the accounting software. All Grant related Year-End and Audit Procedures will be transitioned to the Grant Accountant who has experience in audits, compliance, and reporting of City, State, Local, and Federal Grants. These will be reviewed by Controller and/or Chief Financial Officer. Friend Health will document accounting policies and procedures to reflect the new month-end processes and provide training to staff on current and future policies. Friend Health will ensure that Finance staff will receive at minimum of 25 hours of training each year related to FASB, GAAP, Governmental Financial Reporting, Compliance Requirements, and other related accounting trainings annually. Friend Health will ensure that any staff involved in Financial Reporting that the technical expertise to help with the preparation, review, and analysis of the financial statements.

Name of Contact Person: Dr. Glenda Knight, Town Manager Corrective Action Plan: Management will ensure that remaining FEMA projects are closed out on a timely basis. Anticipated Completion Date: Management will implement the above procedure immediately.