Corrective Action Plans

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

Town management concurs with the finding, and while audit staff were still onsite for field work, Town staff implemented and added tracking and documentation information for all federally funded capital assets, to include unique descriptors, Catalog of Federal Domestic Assistance grant number, funding source and amount. In addition, inventory counts for federally funded assets will be conducted and recorded at least once every two years.

Reporting views of responsible officials and planned corrective actions The Organization will enhance its controls to ensure all tenant files are maintained in accordance with the HUD Handbook.

FINDING 2023-002 Finding Subject: CDBG - Entitlement Grants Cluster - Program Income Contact Person Responsible for Corrective Action: Timothy A. Brown Contact Phone Number and Email Address: 219-755-3225 brownta@lakecountyin.org Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: This same finding was part of the 2022 audit in Finding 2022-003. The department was aware that this same finding would be arising in the 2023 audit again due to multiple year errors of previous staff. The corrective action plan proposed and adopted as part of the Corrective Action Plan for finding 2022-003 is still in force and is working to eliminate such findings in the future. The Lake County Redevelopment Commission adopted Resolution 001-2025 on January 16th, 2025 amending the Policy and Procedures Manual of the Department concerning Program Income (PI) internal controls for proper reporting in the IDIS system to address and correct the finding going forward. Anticipated Completion Date: Done

Reference Number: 2023-012 Finding: Recordkeeping and Documentation for the HOME Investment Partnerships Program Name of Contact Person: Lara Auclair Corrective Active Plan: In the past year, the City has worked to develop an updated record of all HOME assisted projects. Staff thoroughly catalogued all program files creating separate documents for files that are discharged or still active. The documents can be reviewed to add monitoring information. The document contains the period of affordability and the amount due at payoff. Proposed Completion Date: 3/31/26

2023-005 Compliance and Internal Controls over Program Income (Significant Deficiency) U.S. Department of Housing and Urban Development 14.267 – Continuum of Care Program 2023 Funding Recommendation: The Organization should establish procedures to ensure that controls related to program income are consistently implemented. In addition, documentation should be included in each participant's files to support income calculations and the participant's share of rent payable to the program. Corrective Action: We would like to clarify our approach to income documentation within client files: 1. Income Documentation: While not all clients have income, we will ensure that clients without income provide a zero-income affidavit (also known as a non-income affidavit) to document their status. 2. Stabilized Case Management: Our current case managers have been with Temenos CDC (TCDC) for over a year, providing stability and experience in verifying client income. 3. Policy and Procedure Updates: Recent updates to our policies and procedures have introduced standardized forms that clearly differentiate between households with income and those without. 1. Households with income will include the mandatory TCDC income calculation sheet. 2. Households without income will be required to submit the zero-income affidavit. 4. File Checklists: We have created file checklists to ensure uniformity across all client files, enhancing our documentation process. 5. Annual Audits: All client files will be audited by a supervisor at least once a year to ensure compliance with our policies. 6. HMIS Training: Case managers are required to complete mandatory HMIS training, which supports effective compliance in file management and income verification. These measures are designed to strengthen our documentation practices and ensure compliance with audit requirements. Responsible Parties: Sandra Robicheaux – ED Ramona Edwards – Property Manager Wanda Williams – Case Manager Damita Gardner – Case Manager Terence Gomes – Case Manager Date to be Corrected: Mandatory Training Implemented 01/2025 Updated Document Requirements 11/2025

2023-002 PROGRAM INCOME - MATERIAL WEAKNESS Federal Program Community Development Block Grant/Entitlement Grant ALN 14.218; passed through the County of Berks and HOME Investment Partnership Program ALN 14.239; passed through the County of Berks. Condition/Cause During our testing of program income received during 2023, it was noted that the Authority did not report all program income received into IDIS. As a result of not entering all program income into IDIS, our testing indicated that new entitlement funds were drawn down prior to utilizing all available program income on hand. The Authority utilizes a separate general ledger account in the financial reporting software to record all program income received for each federal grant program. The Fiscal Officer enters the program income into IDIS. No internal control existed to ensure the completeness or accuracy of the program income information entered into IDIS. Recommendation We recommend the Authority develop and implement an internal control procedure to ensure that all program income is entered timely within the IDIS system. Prior to drawing down new entitlement funding, the program income general ledger account associated with the grant program should be reviewed and compared to the program income reported within IDIS to ensure all program income is recorded and fully utilized before drawing down additional entitlement funding. Management Response The Authority implemented a new policy to track and document program income: a. Upon receipt of program income, it shall be entered individually into IDIS and assigned to an activity or activities within fifteen (15) calendar days of receipt. b. At the next request for funds for an activity which includes funding from program income, program income shall be used prior to requesting federal funds for the activity. c. The request for federal funds shall be prepared by the Fiscal Officer and reviewed by one of the Assistant Fiscal Officers to determine if program income is being used prior to the request of federal funds. d. If it has been determined and documented that program income is being used prior to the request for federal funds, the request shall be forwarded to the Executive Director for approval. Current Status of Corrective Action Plan This finding has been resolved by management. The new policy was implemented on April 1, 2025.

Benjie Read CFO and Felecia Read Staff Accountant, will update written policies and procedures to implement the requirements of 2 CFR 200.305 to include a review and documentation of the cash draw requests prior to submission. This will be completed within 90 days of audit completion. In addition, we no longer operate the only Federal program where cash draws were allowed.

Finding Number: 2023-044 Finding Name: Inaccurate Information Included in the Financial Reports Finding Condition(s): The Illinois Department of Transportation (IDOT) did not prepare accurate federal financial status reports for the Airport Improvement Program. Name of Contact Person(s): • Melanie Quinn, Contracts Section Manager – Illinois Department of Transportation, Division of Aeronautics • Joe Segobiano, Bureau Chief of Administrative Services – Illinois Department of Transportation, Division of Aeronautics Corrective Action(s): IDOT is working to fully staff and train the Contracts Section of the Division of Aeronautics to ensure reporting is completed as required. Proposed Completion Date: June 30, 2026

2023-003 Period of Performance - Community Development Block Grants/Entitlement Grants Cluster Assistance Listing Number 14.218 Grant Period - Year Ended December 31, 2023 Condition Found The City did not meet program timeliness spending requirements. The City’s unexpended balance at December 31, 2023 of $2,683,379 is more than 1.5 times the $1,374,790 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 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 being met. Responsible Person for Corrective Action Plan Lacie Elzy, Acting Economic & Community Development Director Implementation Date of Corrective Action Plan April 30, 2025

Public Health’s Office of AIDS (OA) agrees with the finding and recommendation. OA introduced and fully implemented an internal Secondary Review (SR) process for all AIDS Drug Assistance Program (ADAP) applications in March 2018. This SR process enables ADAP staff to verify that contracted and certified enrollment workers across California are consistently adhering to eligibility and documentation requirements. However, due to staffing challenges caused by the redirection of staff during the state of emergency declared for the COVID-19 pandemic, ADAP faced significant workforce shortages from March 2020 through much of 2023. This caused a backlog in SR processing, which delayed tasks, including the review of this client’s application. The client’s eligibility lapsed after 130 days, before SR could be conducted. The Eligibility Operations Section (EOS) of ADAP which conducts SR, is now fully staffed and has successfully addressed the backlog. As of early 2024, SR processing has returned to normal operations and is current. Estimated Implementation Date: Already implemented as of April 2024 Contact: Joseph Lagrama, ADAP Branch Chief California Department of Public Health

Condition: The Organization did not have appropriate segregation of duties surrounding the preparation and review of the monthly NIST schedules which accumulate the information necessary to calculate allowable costs and matching for drawdown requests. Further, while the Organization had written procedures over cash management, they were outdated and did not reflect the current staffing model. Planned Corrective Action: Subsequent to year end, the reorganized finance team put new controls and procedures in place. Moving forward the Accounting Supervisor will calculate the NIST MEP monthly program income which is used to determine the monthly award drawdown of cash from the available grant award funds. This is reviewed by the Controller and this report is used to create SF-425. Contact person responsible for corrective action: Alan Kowalewski, Controller Anticipated Completion Date: 07/01/24

Condition: A process was not in place during the year to ensure program income was reported accurately on the SF-425 reports submitted during the year. Planned Corrective Action: Subsequent to year end, the reorganized finance team performed a recalculation and resubmitted corrected SF-425 reports. Moving forward the Accounting Supervisor will calculate the NIST MEP monthly program income which is used to determine the monthly award drawdown of cash from the available grant award funds. This is reviewed by the Controller and this report is used to create SF-425. Contact person responsible for corrective action: Alan Kowalewski, Controller Anticipated Completion Date: 07/01/2024

Instructions were given to the Program staff to ensure that the program income funds will be used for CDBG activities before the withdrawal of CDBG funds.