Corrective Action Plans

Finding 1222673 (2025-001)

Material Weakness 2025

Favor, Inc.

CT

Questioned Costs

Management concurs with the finding and notes that the Organization has hired the appropriate staff and service organizations to complete the audit in a timely manner.

View Audit 406241

Finding 1222664 (2025-003)

Material Weakness 2025

City of Watertown

SD

Internal Control / Segregation of Duties Questioned Costs Material Weakness

Department of Treasury, Passed through the Department of Agriculture and Natural Resources Federal Financial Assistance Listing No. 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Finding Summary: During the engagement, Eide Bailly LLP noted the annual project and expenditure repor...

Department of Treasury, Passed through the Department of Agriculture and Natural Resources Federal Financial Assistance Listing No. 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Finding Summary: During the engagement, Eide Bailly LLP noted the annual project and expenditure report submitted during the year ended December 31, 2025, was not reviewed prior to submission and had amounts reported that did not agree to the general ledger system of the City. Responsible Individuals: Kristen Bobzien, Chief Financial Officer Corrective Action Plan: The City will put procedures in place to ensure the annual project and expenditure report is reviewed for accuracy prior to submission. Anticipated Completion Date: December 31, 2026

View Audit 406234

Finding 1222653 (2025-001)

Material Weakness 2025

Ili Senior Housing - Chapel Valley Road, Inc.

WI

Questioned Costs Significant Deficiency Internal Control / Segregation of Duties

Required Monthly Deposits Not Made Timely. Criteria: Monthly deposits are required to be made to the replacement reserve account. Condition: Monthly deposits were not made. Deposits were made every few months and total amount deposited ties to the required total deposits for the year. Context: Requi...

Required Monthly Deposits Not Made Timely. Criteria: Monthly deposits are required to be made to the replacement reserve account. Condition: Monthly deposits were not made. Deposits were made every few months and total amount deposited ties to the required total deposits for the year. Context: Required deposits were made but they were not made monthly due to cash flow restraint. Response: The Organization will make the required deposits monthly if cash flow allows. Management expects these corrective actions to ensure future compliance with applicable federal and HUD reporting requirements.

View Audit 406220

Finding 1222652 (2025-002)

Material Weakness 2025

Score Association

VA

Reporting Questioned Costs

SCORE believes that this finding stems from exceptional circumstances that occurred during fiscal year 2025 related to the interruption of federal funding. SCORE expensed the last of the authorized fiscal year 2025 federal award funds in March 2025 and is still awaiting authorization for the remaind...

SCORE believes that this finding stems from exceptional circumstances that occurred during fiscal year 2025 related to the interruption of federal funding. SCORE expensed the last of the authorized fiscal year 2025 federal award funds in March 2025 and is still awaiting authorization for the remainder of the appropriated funds under the fiscal year 2025 award. As a result, SCORE was not able to continue submitting monthly draw requests that included the corresponding Detailed Expenditure Worksheets (DEWs). However, in accordance with the Notice of Award requirements, SCORE continued to prepare and submit quarterly financial reports reflecting expenditures that had been earmarked for federal reimbursement. Because the corresponding DEWs and draw requests could not be submitted while federal funding authorization remained pending, these reports could not be fully reconciled to the DEWs that have not yet been filed. Management acknowledges the auditors’ recommendation and will strengthen internal controls around the reconciliation of monthly and quarterly reporting. SCORE will implement enhanced reconciliation procedures to ensure that future reimbursement requests are fully reconciled prior to submission and will establish a documented contingency procedure for reporting periods in which federal funding authorization or reimbursement processing is delayed.

View Audit 406219

Finding 1222625 (2025-005)

Material Weakness 2025

Disability Rights South Dakota

SD

Questioned Costs Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Finding No. 2025-005: Matching Compliance Controls Responsible Individuals: Carrie Watts, Fiscal and Grant Manager Corrective Action Plan: The Organization will establish and maintain documentation to support in-kind/matching balances. Anticipated Completion Date: September 30, 2026

View Audit 406207

Finding 1222605 (2025-002)

Material Weakness 2025

Lee Health System, Inc.

FL

Internal Control / Segregation of Duties Reporting Questioned Costs § 200.512

2025-002: Reporting – Submission of the Data Collection Form Information on Federal Programs Federal Emergency Management Agency Assistance Listing Number: 97.036 Assistance Listing Name: Disaster Grants - Public Assistance passed through Florida Division of Emergency Management U.S. Department of H...

2025-002: Reporting – Submission of the Data Collection Form Information on Federal Programs Federal Emergency Management Agency Assistance Listing Number: 97.036 Assistance Listing Name: Disaster Grants - Public Assistance passed through Florida Division of Emergency Management U.S. Department of Health and Human Services Assistance Listing Number: 93.778 Assistance Listing Name: Medicaid Cluster – Medical Assistance Program Management will implement and maintain the following corrective actions:  Management has added a validation step with a secondary review by another team member to validate that all steps relating to submission have been clearly completed.  Management has also added this to our reporting checklist that is part of the Single Audit Process Narrative. Responsible Party: Controller, under the oversight of the Vice President of Financial Services/Chief Financial Officer, in coordination with the Grants function. Completion date: June 30, 2026

View Audit 406201

Finding 1222518 (2025-002)

Material Weakness 2025

Commonwealth of Puerto Rico Department of Natural and Environmental Resources

PR

Equipment & Real Property Management Internal Control / Segregation of Duties Questioned Costs § 200.302 § 200.403

VIEWS OF RESPONSIBLE OFFICIALS The Puerto Rico Department of Education (PRDE) accepts the finding identified by the auditors regarding the incorrect coding of five (5) reimbursement payments for equipment purchases in account E6170 (Donations and Contributions to Private Entities), rather than in th...

VIEWS OF RESPONSIBLE OFFICIALS The Puerto Rico Department of Education (PRDE) accepts the finding identified by the auditors regarding the incorrect coding of five (5) reimbursement payments for equipment purchases in account E6170 (Donations and Contributions to Private Entities), rather than in the appropriate E5000-series accounts, and the omission of said assets from the institutional property register. The PRDE has initiated the necessary corrective actions to address this deficiency. Specifically, all assets included within the affected reimbursement transactions have been identified, and a detailed inventory is being prepared in which each asset is classified according to the capitalization criteria established in the Restart Program Fiscal Process Guide (unit cost equal to or greater than $500.00 and useful life greater than two (2) years). This inventory distinguishes between capitalizable equipment (E5000 series) and non-capitalizable equipment (E4414), in accordance with applicable regulatory requirements. Once finalized, the inventory file will be submitted to the PRDE’s Office of Property for review and mass upload into the institutional property register, ensuring that all assets acquired with Restart Program funds are properly recorded under PRDE ownership, in compliance with Section 102(h)(3) of the 2018 Hurricane Relief Act and the requirements of 2 CFR §200.302(b)(3)(4). IMPLEMENTATION DATE Fiscal Year 2026-2027 RESPONSIBLE PERSON Edgar Delgado Serrano Interim Director of Federal Affairs Office

View Audit 406169

Finding 1222517 (2025-001)

Material Weakness 2025

Commonwealth of Puerto Rico Department of Natural and Environmental Resources

PR

Matching / Level of Effort / Earmarking Questioned Costs Subrecipient Monitoring § 200.302 § 200.403

VIEWS OF RESPONSIBLE OFFICIALS The Puerto Rico Department of Education (PRDE) acknowledges the audit findings presented by the auditors regarding the Activities Allowed or Unallowed / Allowable Costs/Cost Principles compliance requirement under the IDEA Special Education Cluster (Assistance Listing ...

VIEWS OF RESPONSIBLE OFFICIALS The Puerto Rico Department of Education (PRDE) acknowledges the audit findings presented by the auditors regarding the Activities Allowed or Unallowed / Allowable Costs/Cost Principles compliance requirement under the IDEA Special Education Cluster (Assistance Listing Nos. 84.027 and 84.173). The PRDE recognizes that certain deficiencies identified by the auditors relate to inconsistencies in supporting documentation, documentation retained in departmental systems, and the need to strengthen administrative controls over the documentation supporting disbursements for private educational and therapy services. The Department further acknowledges opportunities to improve the consistency of information maintained in supporting schedules, contract documentation, proposals, and other records used during the invoice review and payment process. The PRDE respectfully clarifies that, in several instances identified during the audit, the questioned conditions were attributable to documentation inconsistencies, system-generated reporting errors, or documentation that supports the transactions but was not maintained or presented in a standardized manner during the audit process. Specifically, the Department notes that adjustment reports recorded in the financial system agreed with the disbursement vouchers despite errors identified in certain Excel master schedules; that invoice validations performed by the Centers are based on the corresponding "Carta de Aprobación de Consulta de Ubicación," which establishes the approved services and applicable rates for each student; and that federal regulations authorize IDEA Part B (ALN 84.027) funds to be used for eligible children ages 3 through 21, including expenses otherwise allowable under the Preschool Grant (ALN 84.173), as permitted under 34 CFR §300.202(a). With respect to students identified as over 21 years of age, the PRDE conducted an individual review of the affected student records and determined that the population includes students who exited the program at age 21 as well as students for whom documentation exists supporting the continuation of services through individualized educational determinations, transition planning activities, or compensatory educational services. The Department recognizes, however, that documentation supporting these determinations was not maintained in a standardized manner that facilitated timely retrieval during the audit. The PRDE further acknowledges that improvements are needed to ensure that procurement documentation, contract amendments, proposals, invoice support, Excel master schedules, and student-level supporting documentation are complete, accurate, consistent, and readily available for audit and monitoring purposes. Accordingly, the Department accepts the auditors' recommendations and is committed to implementing corrective actions designed to strengthen internal controls, standardize documentation practices, improve supervisory review procedures, and enhance coordination among the responsible program and administrative units IMPLEMENTATION DATE Fiscal Year 2026-2027 RESPONSIBLE PERSON Enid Diaz Nieves Executive Director III Alayra Figueroa Gonzalez Associate Secretary for Special Education

View Audit 406169

Finding 1222459 (2025-002)

Material Weakness 2025

Housing Authority of the City of Bastrop. Texas

TX

Allowable Costs / Cost Principles Questioned Costs Cash Management

Corrective Action Plan - Interfund receivables and payables. Contact person - Executive Director, Rhonda Baxter., Executive Director, at the Bastrop Housing Authority, 502 Farm Street, Bastrop TX 78602, telephone number (512) 312-3398. Corrective action planned - Interfund receivables and payables w...

Corrective Action Plan - Interfund receivables and payables. Contact person - Executive Director, Rhonda Baxter., Executive Director, at the Bastrop Housing Authority, 502 Farm Street, Bastrop TX 78602, telephone number (512) 312-3398. Corrective action planned - Interfund receivables and payables will be liquidated each month. Anticipated completion date - Within the next year.

View Audit 406154

Finding 1222458 (2025-001)

Material Weakness 2025

Housing Authority of the City of Bastrop. Texas

TX

Allowable Costs / Cost Principles Questioned Costs HUD Housing Programs

Corrective Action Plan - Individual charge tickets not attached to credit card statements. Contact person - Executive Director, Rhonda Baxter., Executive Director, at the Bastrop Housing Authority, 502 Farm Street, Bastrop TX 78602, telephone number (512) 312-3398. Corrective action planned - Indivi...

Corrective Action Plan - Individual charge tickets not attached to credit card statements. Contact person - Executive Director, Rhonda Baxter., Executive Director, at the Bastrop Housing Authority, 502 Farm Street, Bastrop TX 78602, telephone number (512) 312-3398. Corrective action planned - Individual charge tickets will be attached to credit card statements each month. Anticipated completion date - Within the next fiscal year.

View Audit 406154

Finding 1222377 (2025-008)

Material Weakness 2025

City of Amarillo, Texas

TX

Special Tests & Provisions Questioned Costs Subrecipient Monitoring § 200.303

Finding 2025-008: Special Tests and Provisions – Revenue Diversion Airport Improvement Program View of responsible officials: The City agrees with the finding. Corrective action plan: The City will draft and maintain a formal written policy or documented procedure to ensure airport-generated revenue...

Finding 2025-008: Special Tests and Provisions – Revenue Diversion Airport Improvement Program View of responsible officials: The City agrees with the finding. Corrective action plan: The City will draft and maintain a formal written policy or documented procedure to ensure airport-generated revenues are used only for allowable airport-related purposes in accordance with federal revenue-use restrictions. Implementation dates: July 31, 2026 Responsible person: Lola Ogunremi, Chief Financial Officer

View Audit 406137

Finding 1222371 (2025-007)

Material Weakness 2025

City of Amarillo, Texas

TX

Internal Control / Segregation of Duties Questioned Costs Subrecipient Monitoring § 200.302 § 200.303

Finding 2025-007: Reporting – FAA Form 5100-127 Airport Improvement Program View of responsible officials: The City agrees with the finding. Corrective action plan: The City will enhance its existing reconciliation and review procedures by requiring documented tie-outs of FAA Form 5100-127 amounts t...

Finding 2025-007: Reporting – FAA Form 5100-127 Airport Improvement Program View of responsible officials: The City agrees with the finding. Corrective action plan: The City will enhance its existing reconciliation and review procedures by requiring documented tie-outs of FAA Form 5100-127 amounts to the general ledger, retention of supporting documentation for all reported amounts, and evidence of supervisory review prior to submission. Implementation dates: September 30, 2026 Responsible person: Lola Ogunremi, Chief Financial Officer

View Audit 406137

Finding 1222312 (2025-002)

Material Weakness 2025

Housing Authority of the City of Winston-Salem

NC

Questioned Costs Eligibility HUD Housing Programs

Audit Firm: CohnReznick Period Covered by Audit October 1, 2024 - September 30, 2025 Corrective Action Plan Prepared By: Name: Nancy Thomas Position Chief Financial Officer and Executive Vice President Telephone Number: 336-917-6066 Finding No. 2025-002; Eligibility - Material Weakness PUBLIC HOUSIN...

Audit Firm: CohnReznick Period Covered by Audit October 1, 2024 - September 30, 2025 Corrective Action Plan Prepared By: Name: Nancy Thomas Position Chief Financial Officer and Executive Vice President Telephone Number: 336-917-6066 Finding No. 2025-002; Eligibility - Material Weakness PUBLIC HOUSING Name of Federal Agency: Department of Housing and Urban Development Federal Program Name: Public Housing Operating Fund Assistance Listing Number: 14.850 Federal Award Identification Number and Year: NC012-00000325D; NC012-00000625D; NC012-00000825D; NC012-00000925D; NC012-00001225D; NC012-00002125D; NC012-00002225D; NC012-00003025D; NC012-00003125D; NC012-00003225D; NC012-00034325D; NC012-00003525D; NC012-00003625D; NC012-00003725D; NC012-00003825D; NC012-00004025D; NC012-00004125D Criteria: In accordance with Uniform Guidance, internal controls are required to be in place to ensure compliance with federal requirements and to maintain complete and accurate participant files as noted in 24 CFR 5.233. Condition and Context: Our testing of 40 participant files noted the following: • No electronic income verification was done within the required time period for 20 of 40 participant selections. Effect or Potential Effect: The Housing Authority of the City of Winston-Salem (“ASPIRE”) is not in compliance with federal requirements regarding Eligibility. Cause: Tenant lease files were not maintained, and tenant eligibility was not determined in accordance with Uniform Guidance. Questioned Costs: Unknown Identification as a Repeat Finding: This finding is not a repeat finding. Recommendation: ASPIRE should maintain complete and accurate participant files to ensure compliance with federal requirements. Views of Responsible Official(s) and Planned Corrective Actions: ASPIRE will improve internal controls to maintain complete and accurate participant files to ensure compliance with federal requirements. CORRECTIVE ACTION TO BE TAKEN: 1. No electronic income verification was done within the required time period for 20 of 40 participant selections. Response: Electronic Income Verification (EIV) reports were not completed within the required timeframe for 20 of the 40 public housing tenant files selected for review. The delays were the result of staff oversight and a lack of adequate monitoring to ensure EIV reviews were completed and documented within HUD-required timeframes. To address this issue, Public Housing staff have been retrained on EIV requirements, including HUD-required review and documentation deadlines. Management has reinforced expectations regarding the timely completion of EIV reviews and implemented additional monitoring procedures to ensure compliance. The Assistant Director has also established a tracking system and compliance calendar to assist staff in monitoring and completing required EIV reviews within the prescribed deadlines. In addition, the Assistant Director of Compliance conducts monthly reviews of a random sample of tenant files to verify compliance with EIV requirements and identify any deficiencies including the 120-day move in EIV reports and requires corrective action. Any findings are addressed through staff coaching, corrective action, and additional training as necessary. These measures are intended to strengthen internal controls, improve compliance monitoring, and ensure EIV reviews are completed in accordance with HUD requirements.

View Audit 406123

Finding 1222311 (2025-001)

Material Weakness 2025

Housing Authority of the City of Winston-Salem

NC

HUD Housing Programs Questioned Costs Eligibility

Audit Firm: CohnReznick Period Covered by Audit October 1, 2024 - September 30, 2025 Corrective Action Plan Prepared By: Name: Nancy Thomas Position Chief Financial Officer and Executive Vice President Telephone Number: 336-917-6066 Findings and Questioned Costs - Major Federal Award Program Audit F...

Audit Firm: CohnReznick Period Covered by Audit October 1, 2024 - September 30, 2025 Corrective Action Plan Prepared By: Name: Nancy Thomas Position Chief Financial Officer and Executive Vice President Telephone Number: 336-917-6066 Findings and Questioned Costs - Major Federal Award Program Audit Finding No. 2025-001; Eligibility and Reporting - Material Weakness-HCV Voucher Program Name of Federal Agency: Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster (Section 8 Housing Choice Vouchers Program; Mainstream Vouchers Program) Assistance Listing Number: 14.871; 14.879 Federal Award Identification Number and Year: NC012VO 2025; NC012EF 2025; NC012DV 2025 Criteria: In accordance with Uniform Guidance, internal controls are required to be in place to ensure compliance with federal requirements and to maintain complete and accurate participant files as noted in CFR 5.233, 982.151, 982.405(d), and 982.516. Condition and Context: Our testing of 40 participant files noted the following: • No support was able to be provided regarding tenant lease files for 4 of 40 participant selections. • No tenant addendum was able to be provided for 1 of 40 participant selections. • No HAP contract was able to be provided for 2 of 40 participant selections. • No electronic income verification was done within the required time period for 13 of 40 participant selections. • Annual recertifications were not completed timely for 3 of 40 participant selections. Effect or Potential Effect: The Housing Authority of the City of Winston-Salem (“ASPIRE”) is not in compliance with federal requirements regarding Eligibility and Reporting. Cause: Tenant lease files were not maintained, and tenant eligibility was not determined in accordance with Uniform Guidance. Questioned Costs: Unknown Identification as a Repeat Finding: Repeat finding 2024-001 Recommendation: ASPIRE should maintain complete and accurate participant files to ensure compliance with federal requirements. Views of Responsible Official(s) and Planned Corrective Actions: ASPIRE will improve internal controls to maintain complete and accurate participant files to ensure compliance with federal requirements. CORRECTIVE ACTION TO BE TAKEN: 1. No support was able to be provided regarding tenant lease files for 4 of 40 participant selections. Response: The agency underwent a relocation of its main office and experienced the loss of five Housing Choice Voucher Specialists, which necessitated the engagement of a contractor to assume responsibility for more than 1,800 participant case files. Due to the transition of these caseloads to the contractor and the limited storage capacity at the agency's new office location, physical participant files were transferred to an off-site storage facility. During the process of boxing, inventorying, and relocating more than 5,000 physical files, four participant files were inadvertently misplaced. Upon discovery, management took immediate action to reconstruct the missing files using available electronic records, third-party documentation, and information maintained within Yardi. To mitigate the risk of future file loss and strengthen document retention practices, the agency implemented enhanced procedures effective January 1, 2025. Staff are now required to electronically upload and attach all supporting documentation to the applicable HUD Form 50058 action within Yardi, in addition to maintaining the required physical file. This dual-record retention process ensures that participant documentation is preserved in both electronic and hard-copy formats, providing redundancy and improving accessibility, accountability, and compliance with record retention requirements. 2. No tenant addendum was able to be provided for 1 of 40 participant selections. Response: The absence of the tenant addendum was the result of an oversight by the Housing Choice Voucher Specialist. To prevent similar occurrences in the future, staff have been reminded of the requirement to maintain complete participant files, including all required HUD forms and addenda. In addition, the agency now requires that tenant addendums and all supporting documentation be maintained in both the participant's electronic file within Yardi and the physical file. This dual-record retention process provides an additional level of quality control and helps ensure that required documentation is readily available for future reviews and audits. 3. No HAP contract was able to be provided for 2 of 40 participant selections. Response: The agency was unable to provide a copy of the HAP Contract for two of the forty participant files selected for review. This was the result of an oversight in the maintenance of the participant files. Upon notification, management conducted a review of the files and implemented corrective measures to strengthen document retention practices. Staff have been retrained on the requirement to maintain complete participant files, including all required Housing Assistance Payment (HAP) Contracts and supporting documentation. In addition, the agency now requires that HAP Contracts be maintained in both the participant's electronic file within Yardi and the physical file. Management has also implemented periodic file reviews to verify that required documentation is present and properly retained. These measures are intended to improve recordkeeping controls and prevent similar occurrences in the future. 4. No electronic income verification was done within the required time period for 13 of 40 participant selections. Response: Electronic Income Verification (EIV) reports were not completed within the required timeframe for 13 of the 40 participant files selected for review. The delays were the result of staff oversight and workload challenges experienced during a period of significant staffing turnover within the Housing Choice Voucher Program. To address this issue, Housing Choice Voucher staff have been retrained on EIV requirements, including required timeframes for obtaining and reviewing EIV reports. Management has reinforced expectations regarding timely completion and documentation of EIV reviews. Additionally, the department auditor conducts monthly reviews of a random sample of participant files to verify compliance with EIV requirements and identify any deficiencies requiring corrective action. These measures are intended to strengthen compliance monitoring and ensure EIV reviews are completed within HUD-required timeframes. 5. Annual recertifications were not completed timely for 3 of 40 participant selections. Response: Annual recertifications were not completed within the required timeframe for three of the forty participant files selected for review. The delays were primarily attributable to staffing shortages and caseload transitions that occurred during the audit period, resulting in increased workloads and processing delays. To address this issue, staff have been retrained on annual recertification requirements and processing timelines. Management has reinforced expectations regarding the timely completion of annual recertifications and implemented additional monitoring procedures to track upcoming and overdue recertifications. The Director has also developed an Annual Recertification Calendar for staff to follow. This calendar outlines each step of the annual recertification process and establishes deadlines to ensure timely completion of all required actions. In addition, the department auditor conducts monthly reviews of a random sample of participant files to verify compliance and identify any deficiencies requiring corrective action. These measures are intended to improve timeliness, strengthen oversight, and ensure annual recertifications are completed in accordance with HUD requirements.

View Audit 406123

Finding 1222294 (2025-006)

Material Weakness 2025

Jackson County, Florida

FL

Matching / Level of Effort / Earmarking Special Tests & Provisions Questioned Costs § 200.303

Lynsey Darragh – Administrative Services Director and Lucas Mayo – Grant Administrator will develop procedures to obtain and review certified payrolls for construction projects to ensure compliance with the wage rate requirements. Anticipated completion date is July 31, 2026.

View Audit 406113

Finding 1222287 (2025-005)

Material Weakness 2025

Jackson County, Florida

FL

Matching / Level of Effort / Earmarking Questioned Costs Reporting § 200.303 § 200.326

Lynsey Darragh - Administrative Services Director, Lucas Mayo – Grant Administrator and Tony Pumphrey – Finance Director will develop procedures to ensure that all program reports have documented reviews; are submitted timely and that are reconciled to the accounting records before submission. Antic...

Lynsey Darragh - Administrative Services Director, Lucas Mayo – Grant Administrator and Tony Pumphrey – Finance Director will develop procedures to ensure that all program reports have documented reviews; are submitted timely and that are reconciled to the accounting records before submission. Anticipated completion date is July 31, 2026.

View Audit 406113

Finding 1222250 (2025-001)

Material Weakness 2025

Tri-County Regional Planning Commission

MI

Internal Control / Segregation of Duties Questioned Costs Special Tests & Provisions

2025-001 – Management Review and Approval Auditor Description of Condition and Effect: During our testing of 40 payroll disbursements, we noted certain internal control processes were not consistently performed or documented. This included an instance identified during a payroll conversion in which ...

2025-001 – Management Review and Approval Auditor Description of Condition and Effect: During our testing of 40 payroll disbursements, we noted certain internal control processes were not consistently performed or documented. This included an instance identified during a payroll conversion in which an individual was compensated using an incorrect pay rate. In addition, timesheet review and approval procedures were informal in nature and not consistently documented, including 30 out of 40 instances where timesheets were approved through verbal communication and where there was no evidence of independent review for certain personnel. As a result, there is an increased risk that payroll transactions may be processed using inaccurate rates or unsupported hours and that errors or irregularities may not be detected in a timely manner. Additionally, the absence of documented review reduces accountability and transparency over payroll activities. Auditor Recommendation: We recommend that the Commission enhance formal procedures to ensure payroll reports are reviewed for accuracy of pay rates and hours prior to processing and that all timesheets are subject to documented review and approval, including independent review where appropriate. Corrective Action: Management will develop and implement formal procedures to strengthen controls over payroll processing and timesheet approvals, including requiring documented evidence of review and ensuring independent oversight where appropriate Responsible Person: Jim Snell Executive Director, Sydney Sheaks Finance Manager Anticipated Completion Date: 9/30/2026

View Audit 406105

Finding 1222243 (2025-002)

Material Weakness 2025

Tri-County Regional Planning Commission

MI

Questioned Costs Special Tests & Provisions Material Weakness

2025-002 – Journal Entries and Disbursement Approval Controls Auditors Description of Condition and Effect: During our testing of journal entries and accounts payable disbursements, we noted certain internal control processes were not consistently performed or documented. This included 5 out of 40 i...

2025-002 – Journal Entries and Disbursement Approval Controls Auditors Description of Condition and Effect: During our testing of journal entries and accounts payable disbursements, we noted certain internal control processes were not consistently performed or documented. This included 5 out of 40 instances where supporting documentation was not readily available for journal entries and 19 out of 40 instances where invoices were not consistently reviewed and approved by an individual independent of the preparer in accordance with Commission policy. These conditions are attributable to insufficiently formalized procedures and enforcement of controls governing journal entry support and disbursement review and approval. As a result, there is an increased risk that unsupported or inappropriate transactions could be recorded and that disbursements may be processed without proper authorization, increasing the risk of errors or irregularities not being detected in a timely manner. Auditor Recommendation: We recommend that the Commission strengthen procedures to ensure that all journal entries are supported by appropriate documentation and that all disbursements are reviewed and approved in accordance with established policies, with evidence of such review maintained. Corrective Action: Management will implement procedures to ensure all journal entries are adequately supported and that invoice approvals are documented in accordance with policy requirements. Responsible Person: Jim Snell Executive Director, Sydney Sheaks Finance Manager Anticipated Completion Date: 9/30/2026

View Audit 406105

Finding 1222227 (2025-001)

Material Weakness 2025

Sewerage and Water Board of New Orleans

LA

Questioned Costs Allowable Costs / Cost Principles Cash Management § 200.403

Corrective Action Plan: Management acknowledges the finding relative to formal documentation for eligible project costs and will enhance review procedures for monthly WIFIA loans draws to have written contemporaneous evidence from the lender in addition to preliminary approval received for project t...

Corrective Action Plan: Management acknowledges the finding relative to formal documentation for eligible project costs and will enhance review procedures for monthly WIFIA loans draws to have written contemporaneous evidence from the lender in addition to preliminary approval received for project transfers or changes (i.e. renaming of subprojects listed in the loan closing documents within the same scope approved in the loan). The project changes materialized due to a change in expected timing of Sewer Utility work included in joint projects with the City’s Department of Public Works. As a result, standalone projects were executed to complete the required work by the October 2025 deadline mandated in the Sewer Consent Decree. The changes were discussed with the lender upon notification from the Department of Public Works and included in WIFIA quarterly reporting while the formal project approvals are in process. The Utility’s Project Delivery Unit Director is responsible for ensuring that this corrective action is accomplished with an estimated timeline for completion by September 30, 2026. The WIFIA project scope is defined as: I. Water Line Replacement via the Joint Infrastructure (JIRR) Program; II. Sewer Line Replacement via the Joint Infrastructure Recovery Roads (JIRR) Program; III. Sewer System Evaluation and Rehabilitation Program (SSERP); and IV. Sewer Force Main Replacement and Improvement. The eligible activities include, restoration and replacement of damaged gravity sanitary sewer mains, manhole rehabilitation and repair, CIPP lining and point repairs, Water line replacement and repair, Roadway restoration and ADA curb ramp improvements associated with the utility work.

View Audit 406093

Finding 1222221 (2025-005)

Material Weakness 2025

Housing Authority of the City of Conway

AR

Allowable Costs / Cost Principles HUD Housing Programs Questioned Costs § 200.403

2025-005 Allowability – Interprogram Activity Public Housing Operating Fund ALN 14.850 Significant Deficiency in Internal Control Other matter required to be reported in accordance with Uniform Guidance Condition: The Authority maintains a material interprogram receivable balance in the asset manage...

2025-005 Allowability – Interprogram Activity Public Housing Operating Fund ALN 14.850 Significant Deficiency in Internal Control Other matter required to be reported in accordance with Uniform Guidance Condition: The Authority maintains a material interprogram receivable balance in the asset management program (“AMP”), which is due from other programs of the Authority. This interprogram receivable increased by $373,091 from the September 30, 2024 balance of $433,981, for a total receivable balance of $807,072 as of September 30, 2025. Auditor Recommendations: We recommend that the Authority immediately discontinue using Public Housing Operating Fund resources to fund costs or cash shortfalls of other programs or component units. The Authority should prepare a detailed reconciliation of all interprogram receivable and payable balances by program and implement a repayment plan to restore the Public Housing Operating Fund. We further recommend that the Authority implement written cash management and interprogram accounting procedures to prevent future unauthorized advances. These procedures should include monthly reconciliation of all interprogram balances, supervisory review, and approval of interprogram activity. Management Response: Management acknowledges and accepts responsibility for the deficiencies in internal control over allowability and eligibility and are committed to implementing corrective actions that address missing documentation and lack of verifiable procurement procedures to ensure compliance. Reconcile intercompany balances • CHA is currently working with its fee accountant to complete this process Cease Additional Borrowing • Effective immediately, CHA will discontinue the practice of increasing interprogram borrowings from AMP 1 except where expressly authorized by HUD regulations. Implementing a Repayment Plan • CHA will implement a repayment plan to prioritize repayment from unrestricted or otherwise eligible funding sources in compliance with HUD requirements. Monthly Interprogram Reconciliation • Finance staff and fee accountant will reconcile all interprogram receivable and payable balances monthly. • Any new interprogram activity will be reviewed by the Executive Director and Fee Accountant to ensure allowability before recording. Strengthen Budget Monitoring • Management will perform monthly budget-to-actual reviews for every program to identify operating deficits before they require interprogram borrowing. • Programs experiencing budget shortfalls will implement corrective spending measures or identify alternative eligible funding sources. Improve Cash Flow Management • With the assistance of the fee accountant, CHA will prepare monthly cash flow projections for each program to monitor liquidity and prevent the use of restricted Public Housing Operating Funds for other programs. Implement Internal Control Procedures • Written procedures governing interprogram transactions will be incorporated into the Authority's financial policies. • All interprogram transactions will require documentation supporting the purpose, funding source, and regulatory allowability. Oversight by Fee Accountant • The Authority's Fee Accountant will review interprogram balances during monthly financial statement preparation and report unusual activity or growing receivable balances to management. Board Oversight • The Board of Commissioners will receive monthly financial reports that include interprogram receivable and payable balances to provide ongoing oversight of repayment progress and compliance. Monitoring • The Executive Director and Finance Department will monitor compliance with this corrective action plan monthly and adjust operating budgets as necessary to eliminate future interprogram borrowing. Name of Responsible Person(s): Jackie Otto, Executive Director, Sherdana Wade, Director of Operations, Michelle Guidry, Finance Director Projected Completion Date: Some of the corrective activities are underway. We anticipate full compliance ahead of the June 30, 2027 audited submission.

View Audit 406074

Finding 1222216 (2025-002)

Material Weakness 2025

Housing Authority of the City of Conway

AR

HUD Housing Programs Questioned Costs Allowable Costs / Cost Principles

2025-002 Payroll Significant Deficiency in Internal Control (Repeated from prior year, Finding No. 2024-002) Condition: During our audit of payroll expenditures, the Authority was unable to provide adequate supporting documentation and as a result we were unable to verify that employees were paid at...

2025-002 Payroll Significant Deficiency in Internal Control (Repeated from prior year, Finding No. 2024-002) Condition: During our audit of payroll expenditures, the Authority was unable to provide adequate supporting documentation and as a result we were unable to verify that employees were paid at the properly approved rates for the periods tested and that internal controls were operating effectively. Auditor’s Recommendations: The Authority should implement internal controls over payroll and human resources to ensure complete and accurate personnel files are maintained on an ongoing basis for all employees. The Authority should review all current employee payroll files to ensure their files are up to date and include documentation supporting their approved pay rates and all subsequent compensation changes. Management Response: Management acknowledges the findings and the significant deficiency in internal control. We accept responsibility for the deficiencies in internal control over payroll reporting and are committed to implementing corrective actions as follows to ensure a robust control environment that ensures payroll transactions are verified against authorized documentation. Action(s) Taken: • Comprehensive File Reviews: • Immediately initiated a full review of all current employee payroll files to confirm completeness. • Acknowledge that some documentation predating the implementation of Paycom may remain incomplete; however, CHA is making every effort to ensure files are as complete as possible. • Documentation Verification: • Began verifying that each employee file contains proper documentation, including: • initial pay rates, • compensation changes, and • job descriptions and offer letters, where applicable. • Implemented a checks-and-balances review process to ensure that: • time is entered accurately, • timesheets are reviewed and signed by both the employee and the employee's supervisor, and • Authority leadership conducts a pre-payroll audit prior to processing. • Internal Controls: • The Authority utilizes a third-party provider, Paycom, for payroll administration and recordkeeping. • Timesheets are submitted, reviewed, and approved electronically within the system. • Pre-payroll audits are performed by the Executive Director prior to final payroll approval. • All payroll records are securely stored, easily searchable, and fully traceable through the electronic system. • Final payroll approval by the Executive Director through an approval memo to the HR Director before payments are allowed to be made. • Ongoing Compliance: • The HR Director will conduct semi-annual internal audits of a sample of employee files to verify and document ongoing compliance. • Staff responsible for inputting and reviewing payroll will receive ongoing compliance training. • A standardized file documentation checklist will be used to support consistent and complete recordkeeping. Name of Responsible Person(s): Jackie Otto, Executive Director, Sherdana Wade, Director of Operations, and Natalie Hawks, HR Director Projected Completion Date: Some of the corrective activities are underway. We anticipate full compliance ahead of the June 30, 2027 audited submission.

View Audit 406074

Finding 1222209 (2025-004)

Material Weakness 2025

Cheney Care Community

WA

HUD Housing Programs Questioned Costs Subrecipient Monitoring

Finding 2025-004: Section 232 Loan – Mortgage Insurance Nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities Loan, ALN 14.129 Anticipated Completion Date: December 10, 2025 Recommendation: It was recommended the related party reimburse Cheney Care Communit...

Finding 2025-004: Section 232 Loan – Mortgage Insurance Nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities Loan, ALN 14.129 Anticipated Completion Date: December 10, 2025 Recommendation: It was recommended the related party reimburse Cheney Care Community. It was also recommended management of Cheney Care Community review their internal controls over the cash disbursement process with the necessary individuals involved in the process to ensure disbursements are not made outside of HUD’s allowable regulations going forward. Action Taken: The related party reimbursed Cheney Care Community. The Executive Director/Administrator and Accountant will review the process and procedures in place with the new accounts payable clerk, and implement controls to ensure HUD requirements are followed going forward. In addition, they will review the review and monitoring controls in place and revise as needed to ensure the proper checks are in place to catch errors.

View Audit 406067

Finding 1222208 (2025-003)

Material Weakness 2025

Cheney Care Community

WA

Allowable Costs / Cost Principles Matching / Level of Effort / Earmarking Questioned Costs § 200.302 § 200.303

Finding 2025-003: Section 232 Loan – Mortgage Insurance Nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities Loan, ALN 14.129 Anticipated Completion Date: November 20, 2025 Recommendation: It was recommended the related parties reimburse Cheney Care Commun...

Finding 2025-003: Section 232 Loan – Mortgage Insurance Nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities Loan, ALN 14.129 Anticipated Completion Date: November 20, 2025 Recommendation: It was recommended the related parties reimburse Cheney Care Community for the expenditures paid on their behalf. In addition, it was recommended management review the disbursements made during the periods of turnover to confirm there were no other unallowable payments made. It was also recommended management of Cheney Care Community review their internal controls over the cash disbursement process with the necessary individuals involved in the process to ensure the controls are consistently performed going forward. Action Taken: The related parties reimbursed Cheney Care Community for the expenditures paid on their behalf. Since the new accounts payable clerk started in the Summer of 2025, they have been reviewing all of the supporting documentation for disbursements made during the period of turnover, and accumulating any additional corrections that need to be made. They will continue this process for all disbursements from the period of turnover. The Executive Director/Administrator and Accountant will review the process and procedures in place with the new accounts payable clerk, and implement controls to ensure the appropriate facility and general ledger account coding are made going forward. In addition, they will review the review and monitoring controls in place and revise as needed to ensure the proper checks are in place to catch errors.

View Audit 406067

Finding 1222207 (2025-002)

Material Weakness 2025

Cheney Care Community

WA

HUD Housing Programs Questioned Costs Reporting

Finding 2025-002: Section 232 Loan – Mortgage Insurance Nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities Loan, ALN 14.129 Anticipated Completion Date: December 31, 2026 Recommendation: It was recommended Cheney Care Community implement internal control...

Finding 2025-002: Section 232 Loan – Mortgage Insurance Nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities Loan, ALN 14.129 Anticipated Completion Date: December 31, 2026 Recommendation: It was recommended Cheney Care Community implement internal controls to ensure that the audited financial statements are filed in accordance with the regulatory agreement. Action Taken: On February 8, 2025, the audit was submitted to HUD through REAC. The Executive Director/Administrator and Accountant will review the process and procedures in place for the audit, and implement internal controls to ensure that the audited financial statements are filed in accordance with the regulatory agreement going forward.

View Audit 406067

Finding 1222206 (2025-001)

Material Weakness 2025

Cheney Care Community

WA

HUD Housing Programs Reporting Questioned Costs

Finding 2025-001: Section 232 Loan – Mortgage Insurance Nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities Loan, ALN 14.129 Anticipated Completion Date: September 30, 2026 Recommendation: It was recommended management of Cheney Care Community review thei...

Finding 2025-001: Section 232 Loan – Mortgage Insurance Nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities Loan, ALN 14.129 Anticipated Completion Date: September 30, 2026 Recommendation: It was recommended management of Cheney Care Community review their internal controls over the financial reporting and close processes to determine whether additional controls over the preparation of the final trial balances and related schedules can be implemented to provide reasonable assurance that financial statements are prepared in accordance with U.S. GAAP. Action Taken: Cheney Care Community will review their internal controls over the financial reporting and close processes to determine whether additional controls need to be implemented going forward.

View Audit 406067

Corrective Action Plans

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