Corrective Action Plans

State of Condition:During the year ended June 30, 2024, the Center had unexpended program income for the 5 year term of the cooperative agreement. Corrective Action: Resolved. The Center made restitution for the unexpended amount as well as implemented new procedures to track program income and expenses to ensure the issue does not occur in the future

2024-003 Period of Performance - Community Development Block Grants/Entitlement Grants Cluster Assistance Listing Number 14.218 Grant Period - Year Ended December 31, 2024 Condition Found The City did not meet program timeliness spending requirements. The City’s unexpended balance at December 31, 2024 of $2,548,256 is more than 1.5 times the $1,319,714 entitlement grant for the current year. We consider this to be an instance of non-compliance relating to the Period of Performance Compliance Requirement. Corrective Action Plan The City of Decatur received the 2023 Management Letter on May 15, 2025 with this same instance of non-compliance, after most of the 2024 financial audit was completed and the 2024 fiscal year had ended. The City of Decatur Economic & Community Development Department is under new leadership with Lacie Elzy as Acting Economic & Community Development Director. Director Elzy will be reviewing all grant programs and duties in the department and ensuring that grant requirements are met. As of the date of this letter, timeliness spending requirements have been met and the City is compliant. Responsible Person for Corrective Action Plan Lacie Elzy, Acting Economic & Community Development Director Implementation Date of Corrective Action Plan December 31, 2025

Views of responsible officials and planned corrective actions – Management will continue their review process of the submitted reports.

Transitional Living for homeless Youth – Assistance Listing No. 93.550 Recommendation: It is recommended that the Organization implement controls to monitor program income and ensure that the funds are being properly used before requesting additional federal funds. This could include requiring regular reporting on the use of program income and conducting periodic reviews to ensure compliance with program requirements. Additionally, the Organization should review its policies and procedures to ensure that they are in compliance with program requirements and make any necessary updates. Finally, the Organization should ensure that all staff members responsible for monitoring program income are properly trained and have a clear understanding of program requirements. Note, the organization implemented the recommendations in April of 2024 after the 2023 audit was completed. However, there was still a portion of 2024 where the process was not implemented. Thus, a repeat finding was warranted Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: During each Payment Management System Draw process, the Finance Director will verify the draw amounts and run a program income and expense report to verify that the amount of miscellaneous expenses for the Transitional Living Program are more than the program income received. A copy of the income and expense statement will be saved in each draw file with the other verification documents. A column for verification initials of this process was added to the ACF Grant Balances Spreadsheet used for recording the draw amounts and dates of the draws. Name(s) of the contact person(s) responsible for corrective action: Julia Montebello, Finance Director Planned completion date for corrective action plan: 4/26/2024

Corrective Action Plan Actions Planned – The HRA will have a separate individual with appropriate knowledge and experience review and approve the IDIS reports, including a review of reconciliations from these reports to support financial data. Additionally, the HRA staff will work with the Department of Housing and Urban Development to resolve the system-generated errors in these reports. Official Responsible – Sarah Abe, HRA Administrator Planned Completion Date – December 31, 2025 Disagreement With or Explanation of Finding – The HRA agrees with this finding. Plan to Monitor – Sarah Abe, HRA Administrator, will oversee the process to ensure an individual is assigned to review the reports and that the Department of Housing and Urban Development is contacted to resolve errors in reports.

Finding 2024-005 Reporting – Internal Control over Reporting City will incorporate regular reconciliations of ARPA Expenditures to ensure better tracking and accurate reporting. To comply with reporting requirements the City will be revising the SLFRF reporting for the upcoming year due on April 30, 2025 to reflect the appropriate amounts. Furthermore, a final reconciliation with all applicable back-up will be provided to the Finance Manager by the Finance Management Analyst for review and approval prior to submission to ensure accurate reporting. Responsible Person: Finance Manager Expected Implementation: July 1, 2025

FINDING 2024-002: Program Income Response: Montana Office of Public Instruction has informed us of this error in management of the 21st Century Grant. In order to be compliant, we are not charging fees for programs within this grant.

The City will improve its internal controls by implementing a new policy and procedures that will require staff training and outline detailed procedures for complying with program income regulations. The policy will: (1) require staff to annually participate in HUD trainings related to program income, (2) require staff to immediately deposit and reconcile program income upon receipt, (3) require staff to prepare a monthly program income report and (4) require management to review the program income report to ensure program income is applied to eligible expenses prior to drawing down grant funds.

Finding 2024-002 Reporting – Internal Control and Compliance over Reporting City will incorporate more regular reconciliations of ARPA Expenditures to ensure better tracking and accurate reporting. To comply with reporting requirements the City will be revising the SLFRF reporting for the upcoming year due on April 30, 2025. Responsible Person: Director of Finance Expected Implementation Date: July 1, 2025

Finding No. 2024-002: Period of Performance (Significant Deficiency – Federal Awards) Federal Award: 14.218 - CDBG – Entitlement Grants Cluster Audit Recommendation: We recommend the City adhere to the workout plan submitted to HUD to comply with the CDBG timely expenditure requirements. Administration’s Comments: The City will adhere to procedures to comply with the CDBG timeliness standard specified. Anticipated Completion Date: June 30, 2025 Contact Person(s): Holly Kawano, Department of Budget and Fiscal Services, Federal Grants Coordinator

Finding Reference: 2024-011 - Program Income, Ryan White (UMMC) Responsible Official: Mustafa Khawaja, Interim Director of Post-Award Corrective Action Planned: Based on feedback received from a Sponsor-led site visit in 2024, UMMC practices and policies are appropriately aligned with the intent of the program. UMMC will make efforts to ensure that all practices and policies are clearly documented and evaluated periodically. Estimated Completion Date: June 30, 2025

Finding 2024-002 – Documentation of Costs and Vendor Invoices – Financial Reporting and Internal Controls ALN 14.850 & 14.871– Noncompliance & Material Weakness Recommendation: We recommend that the Authority amend policies and procedures to better facilitate effective purchasing controls. A clear audit trail should be maintained to ensure proper approval, as well as documentation to support the allowability and eligibility of costs. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: We will enhance our internal controls over purchasing and Develop detailed procedures for creating, approving, and managing purchase orders. Name(s) of the contact person(s) responsible for corrective action: Navonya Kolani, Executive Director Planned completion date for corrective action plan: September 30, 2025.

Response: The District has operated the LINKS afterschool program supported by 21st Century funding for over 20 years. The Office of Public Instruction (OPI) performs monitoring of schools with 21st Century funding every 4 to 5 years. The OPI did a monitoring of the District in 2020 and found no compliance issues. In August of 2024, OPI informed the District that we were not in compliance with changes to the federal regulations made in 2018. In February of 2025, OPI sent a letter to the District indicating that parent fees charged in FY24 and FY25 would need to be applied to reduce federal funding in the future due to the new rules established in 2018. The District is in the process of appealing this finding from OPI and has stopped charging parent fees as of October 2024, while considering the impact of reduced funding to this community program.

The District will ensure eligibility calculations on submitted applications are properly performed. The District will be more attentive to the list of free and reduced students and will ensure the students have an approved application on file. The District has been in touch with Payschools and both entities are on the same page moving forward.

Condition: As of the March 31, 2024 reporting date, the Town’s Project and Expenditure Reports overstated expenditures by $821,704. Corrective Action Planned: We, the Town of Charlton, plan to correct our overstated expenditures by correcting the reporting that we submit to the U.S. Treasury and updating to reconcile to what was actually paid and processed by the Town out of ARPA funds. Anticipated Completion Date: April 30, 2025 Contact: Ashley Obrzut, Finance Director, Town of Charlton

Program income transferred to the operations account exceeded the amount of allowable administrative costs by $ 13,158. The Entity will reimburse the Cares Act RLF program for the $ 13,158. The Entity’s director James Morgan is responsible.

Anticipated Completion date June 30, 2025

The Organization will review the terms and conditions of all federal awards to determine if program income is applicable to the federal program. For such federal programs, the Organization will ascertain the requirements for determining or assessing the amount of program income, and the requirements for recording and using program income. If required in accordance with the program, the Organization will implement a process for tracking and reporting the program income generated and used during the fiscal year. Further, the Organization will add another level of review of financial reports to ensure that program income is properly reported in accordance with the terms and conditions of the award. Anticipated Completion Date: 3/31/2025 Responsible Contact Person: Jeffery McNeal, Chief Financial Officer

At this time all fiscal standard and procedures are being updated. We will ensure documented policies exist and are being adhered to.

Finding Number: 2024-001 Anticipated Completion Date: January 31, 2025 Responsible Contact Person: David Tatro, CEO Planned Corrective Action: The Organization provided approximately 2,300 self-pay encounters to be audited for the year ended May 31, 2024. 40 encounters were identified for compliance testing related to the sliding fee. Three self-pay accounts were identified with issues which resulted in this finding. The issues related to patients receiving an improper discount rate. This issue will be resolved as of January 31, 2025 by reviewing all sliding fee scale applications for accuracy. The Organization will continue to monitor the sliding fee scale amounts applied to ensure ongoing compliance with the requirements. The Organization will review five sliding fee scale applications each week to ensure eligibility determination, billing and collection follows the Sliding Fee Discount Program. This will go through May 2025 with a reassessment at that point, based on the results of the internal review.

The City concurs with the finding. The CDBG contract check list has been updated to include the FFATA reporting requirement. The Fiscal CDBG Policies and procedures have been modified to include a section on FFATA reporting to be completed with the time frame set forth in the FF AT A requirements.

Condition: The Organization lacked sufficient controls to ensure consistent reviews/approvals of monthly reimbursement requests and tenant rent calculations throughout the year. Planned Corrective Action: - The Rent Analyst will complete the rent calculations and sign off. - The Director of Accounting will review and approve the checklist in writing. Contact person responsible for corrective action: The Director of Accounting will oversee all rent calculations. Anticipated Completion Date: Effective 01-13-2025.

Federal Program, Assistance Listing Number and Name - ALN 14.239, Department of Housing and Urban Development, Home Investment Partnerships Program Condition: Original Finding Description - The City is required to track and report program income within HUD’s Integrated Disbursement and Information System (IDIS) and the general ledger. The city reported fiscal 2024 program income in fiscal 2025. Contact Person Responsible for Corrective Action / Anticipated Completion Date - Regina Greear, Julie Schneider; Anticipated completion date: June 2025 Planned Corrective Action - The city is in the process of enhancing processes and controls to ensure timely, accurate and consistent receipts of the program income and the reconciliations.

Finding #2024-001 – Program Income Contact – Suzanne Tobin, Chief Financial Officer Telephone Number – (301)-832-3810 Completion Date – December 10, 2024 Corrective Action Plan: Effective immediately, the Organization will comply with the program income compliance requirement of the U.S. Department of Housing and Urban Development (HUD) Continuum of Care Program by netting program income generated from the pass-through grant to the amount to be reimbursed prior to submitting the reimbursement request to HUD, in accordance with the protocol outlined in the manual issued by the Behavioral Health Authority (BHA).

State of Condition:During the year ended June 30, 2024, the Center had unexpended program income for the 5 year term of the cooperative agreement. Corrective Action: Resolved. The Center made restitution for the unexpended amount as well as implemented new procedures to track program income and expenses to ensure the issue does not occur in the future