Corrective Action Plans

Finding 1210990 (2024-015)

Material Weakness 2024

MS

Allowable Costs / Cost Principles Questioned Costs Student Financial Aid

Finding 2024- 015: Allowable Costs/ Cost Principle Signifi cant Deficiency In Internal Contro l Over Compliance Criteria: Per 45 CFR 1355.57(d), a title N·E agency must allocate project costs in accordance with applicab le HHS regulations and other guidance. Per 45 CFR 75.303(a), non-Federal entitie...

Finding 2024- 015: Allowable Costs/ Cost Principle Signifi cant Deficiency In Internal Contro l Over Compliance Criteria: Per 45 CFR 1355.57(d), a title N·E agency must allocate project costs in accordance with applicab le HHS regulations and other guidance. Per 45 CFR 75.303(a), non-Federal entities expending HHS awards must establish and maintain effective internal con trols over compliance with Federal sta tes, regu lations, and the terms and conditionsof the Federal award. Condition: Our audit procedures over administrative services disclosed that MDCPS lacked proper policies and procedures over data editing or modification of the cost allocation system. Perspe ctive: Per discussion with management, it was determined that no formal policies and procedures were established for data editing or modifications. Personnel Responsible for Corrective Action : Name: Christopher Roy Title : Deputy Director to the CFO Email: Christopher.Roy@mdcps.ms.gov Phone Number: 601-359-4043 Corrective Action Plan: MDCPS Is strengthening segregation of duties within the Cap Plus system by limiting administrative privileges and ensuring supervisory approval is documented for all cost allocation changes. AntJdpated Completion Date: Permissions were corrected and completed as of March 31, 2026. Documented process and policy anticipated completed May 30, 2026.

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Finding 1210989 (2024-014)

Material Weakness 2024

State of Mississippi

MS

Allowable Costs / Cost Principles Questioned Costs Student Financial Aid

Finding 2024 - 014: Allowable Costs/ Cost Prlnclple Significant Defldency In Internal Control Over Compliance Criteria: Per 45 CFR 1355.57(d), a title IV-E agency must allocate project costs in accordance with applicable HHS regulati ons and other guidance. Per 45 CFR 75.303(a), non-Federal entities...

Finding 2024 - 014: Allowable Costs/ Cost Prlnclple Significant Defldency In Internal Control Over Compliance Criteria: Per 45 CFR 1355.57(d), a title IV-E agency must allocate project costs in accordance with applicable HHS regulati ons and other guidance. Per 45 CFR 75.303(a), non-Federal entities expending HHS awards must establish and maintain effective internal controls over compliance with Federal states, regulations, and the terms and conditions of the Federal award. Condition: Our audit procedures over administrative services disclosed that MDCPS lacked proper controls over employee training costs expended through a specific vendor. Perspective: Below are the exceptions noted in our testing of administrat ive services for appropriate review over cost allocation . The samples were not stat ist ically valid. One hundred percent of the costs charged for employeetraining using a specific vendor (four transactions) were te.ste d, and four out of four transactions lacked appro priate review. Personnel Responsible for Corrective Action: Name: Christopher Ray Title : Depuly to 1he Chief Financial Officer Email: christoher.Roy@mdcps.ms.gov Phone Number: 601-359-4043 Corrective Action Plan: MDCPS will enforce our policy requiring approval of the grant management's team's review of appropriate detailed documentation provided by vendor payments. Antldpated Completion Date: Completed as of March 31, 2026.

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Finding 1210988 (2024-013)

Material Weakness 2024

State of Mississippi

MS

Reporting Questioned Costs Student Financial Aid

Finding 2024- 013: Terminated User Access Not Removed Timely Significant Deficiency In Internal Control Over Financial Reporting Criteria: Per 45 CFR 75.303(a), non-Federal entitles expendingHHS awards must establish and maintain effective internal controls over compliance with Federal states, regul...

Finding 2024- 013: Terminated User Access Not Removed Timely Significant Deficiency In Internal Control Over Financial Reporting Criteria: Per 45 CFR 75.303(a), non-Federal entitles expendingHHS awards must establish and maintain effective internal controls over compliance with Federal states, regulati ons, and the terms and conditions of the Federal award. Management must mainta in effective user access controls over financia l reporting systems. This Includes promptly removing or disabling access for terminated users and periodically reviewing user access to confirm it aligns with current employment status and job responsibilities. Condition: Testing of IT general controls identifiedinstances where terminated employees' user accounts or financial application access remained active beyond the termination date. MDCPS did not disable terminated user access or remove related application rights in a timely manner. Perspective: During our review of general IT controls, the auditor received a list of terminated employees. Of the 11 employees presented, 6 maintainedaccess to MACWIS after termination.Further, during the performance of a process walkthrough,it was noted that the former chief financial officer was still active in CapPlus and SPHARS. Personnel Responsiblefor Corrective Action: Nome: Shannon Rushton (Employee Seporotlon SOP) Title : Deputy Commissionerof Human Capitol Email: Shannon.Rushton@mdcps.ms.gov Phone Number: 601-359-2696 Name: Christopher Ray (CapPlus User Termination) Title: Deputy Director to the CFO Email: Christopher.Roy@mdcps.ms.gov Phone Number: 601-359-4043 Corrective Action Plan: MDCPS has reinforcedthe EmployeeSeparation St andard Operating Procedure(2.19.2.2) to ensure all system access is removed promptly upon employee separation. Human Resources will notify system administrators immedai tely upon employeetermination, and system administrators will disable all associated application access no later than th e employee's final day of employment. Human Resources will conduct periodic user access reviews to ensure procedures are properly Imp lemented. The Finance Division will ensure the cap Plus software's access and penn1ss1ons are monitored and maintained by the agency with assistance from Interactive Voice Application (IVA). Upon a Cap Plus user's termination , they will be removed from the Cap Plu s software upon their last day of employment or the removal of th eir dutie.s by the agency. These permissions do not require IT or Human Resource control as Cap Plus i s independent of all accounting, payroll, and HR software. Antldpated Completion Date: Empl oyee Separation SOP effectiveas of July 22, 2025. CapP lus user's termination procedures effective as of March 31, 2026.

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Finding 1210980 (2024-037)

Material Weakness 2024

State of Mississippi

MS

Reporting Internal Control / Segregation of Duties Questioned Costs

ALN Number 2024 -037 93.558 Temporary Assistance for Needy Families (TANF) 93.568 Low-Income Home Energy Assistance Program (LIHEAP) Strengthen Controls to Ensure Compliance with Federal Funding Accountability and Transparency Act (FFATA) Reporting Requirements. Federal Award No. All Current Active ...

ALN Number 2024 -037 93.558 Temporary Assistance for Needy Families (TANF) 93.568 Low-Income Home Energy Assistance Program (LIHEAP) Strengthen Controls to Ensure Compliance with Federal Funding Accountability and Transparency Act (FFATA) Reporting Requirements. Federal Award No. All Current Active Grants Response: MOHS does not concur with this finding. MOHS has implemented and adhered to standardized operating procedures (SOPs) over the past year to ensure timely and periodic reporting under the Federal Funding Accountability and Transparency Act (FFATA). In March 2025. the federal government retired the Federal Subaward Reporting System (FSRS), which MDHS used to submit new and modified awards. The successor platform, SAM.gov. launched with migrated award data that reflects only the most recent award amount. Historical submission details-including the timestamps that demonstrated timely filings-were not retained in the migrated records. Because the majority of MDHS's FFATA submissions typically occur in November and January. the migrated data does not display the original submission dates associated with those reports. Following the retirement of FSRS, MDHS no longer has access to the legacy system and therefore cannot produce the historical report previously used to verify timely submission. Additionally, the compliance supplement does not address the FFATA reporting processes within SAM.gov. Notwithstanding these system changes, MOHS continues to prepare and submit FFATA reports in accordance with its established SOPs and within the required timeframes. Corrective Action Plan: MOHS will make efforts to create practical. auditable processes to ensure timely and accurate FFATA reporting and solid proof of timeliness and completeness, in the new system.

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Finding 1210976 (2024-038)

Material Weakness 2024

State of Mississippi

MS

Subrecipient Monitoring Internal Control / Segregation of Duties Questioned Costs

SUBRECIPIENT MONITORING ALN Number 93.558 Temporary Assistance for Needy Families (TANF) 2024-038 Strengthen Controls over On-Site Monitoring for the Temporary Assistance for Needy Families (TANF) Program. Federal Award No. All Current Active Grants Response: MDHS concurs that controls should be str...

SUBRECIPIENT MONITORING ALN Number 93.558 Temporary Assistance for Needy Families (TANF) 2024-038 Strengthen Controls over On-Site Monitoring for the Temporary Assistance for Needy Families (TANF) Program. Federal Award No. All Current Active Grants Response: MDHS concurs that controls should be strengthened over On-Site monitoring for the TANF program. Corrective Action Plan: 1. Strengthen Controls over On-Site Monitoring for the TANF Program A. The Office of Compliance. Division of Monitoring has made significant strides in strengthening controls over the subrecipient monitoring process. The Division continues to review and update the processes and procedures as necessary to ensure processes are adequate and effective. Staff are constantly notified/trained on updates to policies. procedures. and regulations to ensure continued compliance with monitoring the agency's subgrant agreements. B. Responsible Party: Laketha Gilmore. Director of Monitoring and Kameron Harris, Chief Compliance Officer C. Completion Date: The corrective action has been implemented and is ongoing.

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Finding 1210974 (2024-035)

Material Weakness 2024

State of Mississippi

MS

Eligibility Questioned Costs Material Weakness

ELIGIBILTY ALN Number 93.558 Temporary Assistance for Needy Families (TANF) 202 -035 Strengthen Controls to Ensure Compliance With Eligibility Requirements of the Temporary Assistance for Needy Families (TANF) Program . Federal Award No. All Current Active Grants Response: MDHS has implemented a mul...

ELIGIBILTY ALN Number 93.558 Temporary Assistance for Needy Families (TANF) 202 -035 Strengthen Controls to Ensure Compliance With Eligibility Requirements of the Temporary Assistance for Needy Families (TANF) Program . Federal Award No. All Current Active Grants Response: MDHS has implemented a multi-tiered approach to address the audit findings from the Fiscal Year 2024 Single Audit. These efforts focus on strengthening eligibility controls and enhancing internal oversight. MDHS is required to adhere to specific eligibility and verification standards for the TANF program. including mandatory immunization checks, age limit monitoring. and proper authorization of work stipends. During the Fiscal Year 2024 Single Audit 16 instances were identified where these controls were not fully met. resulting in questioned costs of $2,592. MDHS has already taken steps to address the identified overpayments and documentation gaps. To correct these deficiencies, MDHS is strengthening its internal control processes within the Division of Economic Assistance and Eligibility (DEAE) to ensure that immunization records are verified within the required thirty (30) day window· and benefit adjustments for children reaching age eighteen (18) are processed promptly. Furthermore. MDHS is implementing case reviews to ensure all payments are approved by authorized personnel and that work stipends are supported by completed applications and accurate attendance records. MDHS has committed to ongoing staff training to prevent the recurrence of these eligibility and authorization errors. Corrective Action Plan: I. Child's current immunization status was not verified within thirty (30) days. A. DEAE provides policy guidelines via a weekly "Did You Know" email to all staff. Information regarding the immunization requirement will be included in this series by June I. 2026. Statewide TANF and TWP training will begin on June 1. 2026 B. Responsible Parties: Shauna Aguilar. Deputy Director- Economic Programs, Marilyn Williams, Deputy Division Director- Field Operations. Marshea Cooper, Deputy Division Director- State Operations C. Anticipated Completion Date: August I. 2026 2. TANF benefits were not reduced promptly once a dependent child reached 18 years old. resulting in overpayment. A. There is a report generated monthly that identifies children in households that will reach their 18th birthday one month prior to their 18th birthday. In addition, DEAE conducted training in February and March 2026 with regional directors. county directors. and supervisors that included information on using the above-mentioned report to prevent overpayment due to dependent children turning 18 B. Responsible Parties: Shauna Aguilar. Deputy Director- Economic Programs. Marilyn Williams. Deputy Division Director- Field Operations. Marshea Cooper. Deputy Division Director- State Operations C. Anticipated Completion Date: This corrective action has been implemented and completed. 3. TANF benefit payment \Vas approved by an unknown authorizer. A. This finding is due to a system issue that has been resolved. MIS identified that the system did not hold the names of employees who left the agency and replaced the name with “unknown authorizer” Cases now hold the authorizer’s name going forward from the fix. B. Responsible Parties: Shauna Aguilar. Deputy Director- Economic Programs. Marilyn Williams. Deputy Division Director- Field Operations. Marshea Cooper. Deputy Division Director- State Operations C. Anticipated Completion Date: This corrective action has been implemented and completed. 4. Transportation work stipend was overpaid based on the recipient's scheduled hours. A. DWD revie\vs cases monthly to identify errors. Statewide TANF and TWP training will begin on June 1. 2026 . B. Responsible Parties: Shauna Aguilar, Deputy Director- Economic Programs. Marilyn Williams. Deputy Division Director- Field Operations. Marshea Cooper. Deputy Division Director- State Operations C. Anticipated Completion Date: In progress and ongoing 5. Transitional work stipends were paid to recipients without completed applications on file. A. Statewide TANF and TWP training will begin on June 1·. 2026 . B. Responsible Parties: Shauna Aguilar. Deputy Director- Economic Programs. Marilyn Williams. Deputy Division Director- Field Operat ions. Marshea Cooper. Deputy Division Director- State Operations C. Anticipated Completion Date: August I. 2026 6. Transitional work stipend amounts paid to recipients were incorrect based on attendance records. A. The TANF Policy team will begin reviewing transition cases on May I. 2026. B. Responsible Parties: Shauna Aguilar. Deputy Director- Economic Programs. Marilyn Williams, Deputy Division Director- Field Operations. Marshea Cooper. Deputy Division Director- State Operations C. Anticipated Completion Date: Implementation May I. 2026 and ongoing process

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Finding 1210964 (2024-009)

Material Weakness 2024

State of Mississippi

MS

Reporting Questioned Costs Procurement, Suspension & Debarment § 200.303

Assistance Listing No. 17.258, 17.259, 17.278 and Workforce Innovation and Opportunity Act Cluster Type of Compliance Requirement: Reporting - FFATA Response: There is no disagreement with the audit finding. Corrective Action Plan: MDES agrees that the FSRS system generated reports provided to CLA d...

Assistance Listing No. 17.258, 17.259, 17.278 and Workforce Innovation and Opportunity Act Cluster Type of Compliance Requirement: Reporting - FFATA Response: There is no disagreement with the audit finding. Corrective Action Plan: MDES agrees that the FSRS system generated reports provided to CLA did not indicate the date of submission and therefore CLA was unable to determine if the reports were submitted timely. MDES will strengthen controls to ensure that future system generated reports have a confirmed submission date documented. Name(s) of the contact person(s) responsible for corrective actions: Contact person(s) responsible: Tyler Berch Contact Phone number: 601-321-6214

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Finding 1210963 (2024-010)

Material Weakness 2024

State of Mississippi

MS

Eligibility Questioned Costs Significant Deficiency § 200.303

Assistance Listing No. 17.258, 17.259, 17.278 and Workforce Innovation and Opportunity Act Cluster Type of Compliance Requirement: Eligibility Response: There is no disagreement with the audit finding. Corrective Action Plan: MDES agrees with the finding and will strengthen controls around WIOA elig...

Assistance Listing No. 17.258, 17.259, 17.278 and Workforce Innovation and Opportunity Act Cluster Type of Compliance Requirement: Eligibility Response: There is no disagreement with the audit finding. Corrective Action Plan: MDES agrees with the finding and will strengthen controls around WIOA eligibility to ensure documentation is complete and in order. Name(s) of the contact person(s) responsible for corrective actions: Contact person(s) responsible: Robert Bock Contact Phone number: 601-321-6478

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Finding 1210958 (2024-008)

Material Weakness 2024

State of Mississippi

MS

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

Compliance Finding on FFATAReporting Reference No. 2024-008 Dear Auditor White: Pursuant to the policies and procedures governing audits of state agencies, I am hereby submitting our response to a finding made during the recent audit of the Mississippi Development Authority ("MDA") concerning the re...

Compliance Finding on FFATAReporting Reference No. 2024-008 Dear Auditor White: Pursuant to the policies and procedures governing audits of state agencies, I am hereby submitting our response to a finding made during the recent audit of the Mississippi Development Authority ("MDA") concerning the reporting requirements under the "Federal Funding Accountability and Transparency Act" ("FFATA"). Specifically, the following determination was made: AUDIT FINDING: FFATA reporting During Fiscal year 2024, subawards were obligated on February 20, 2024, should have been reported to FSRS by April 30, 2024. MDA could not provide support that required FFATA reporting was completed by April 30, 2024 per SAM.gov, ten of the ten subawards selected for testing were not reported to FSRS until 7/31/2024. 2024-008: We recommend that MDA develop internal controls and procedures to ensure that all required subawards are reported to SAM.gov in accordance with FFATA reporting requirements. Response: During the period in question, the General Services Administration ("GSA") began the process of converting the Federal Subaward Reporting System ("FSRS") into the System for Award Management ("SAM.gov"). As of March 8, 2025, FSRS was formally retired by GSA; POST OFFICE BOX 849 • JACKSON, MISSISSIPPI 39205-0849 TELEPHONE (601) 359-3449 • FAX (601) 359-2832 • www.mississippi.org therefore, it was no longer available to determine the status of any information which once resided within it. It should be noted that, per GSA, all "data entered and saved into FSRS.gov by the deadline will be moved to SAM.gov and will be available beginning March 8, 2025." The auditors first brought the deficiency to MDA's attention on May 25, 2025. By this time, FSRS was inaccessible to detennine what reporting had been made prior to the conversion. MDA produced a printout showing that the required information was entered into the FSRS system for the grants, complying with FFATA. Furthermore, MDA presented a note published by GSA on April 25, 2025, which stated under the heading "Subaward and Subcontract Search" that it had " resolved an issue where there were missing reports from the Subaward and Subcontract search results." This note clearly establishes that there were data/reports lost in the conversion process. Upon lea rning of the deficie ncy, MDA reported the same to GSA; however, no response addressing the issue has been received. Con-ective Action Plan: Because no specific policy or procedure exists addressing FFATA repo rting, MDA is developing a specific policy and procedure to ensure all requirements of the law are met. This policy will adopt the deadline for filing the required information in SAM.gov by the end of the month following the month in which MDA makes a subgra nt greater than or equal to $30,000. Furthe rmore, MDA will screen capture all reports, with proper documentation of the date of submitta l, and place this documentation into the grant file and the electronic file system, as well as maintain a separate FFATA reporting file for each fiscal year. This policy and procedure will be finalized within the next thirty (30) days. Charles L. Bea rman, the director of the Community Incentives Division of MDA, is responsible for this con-ective action. If you should have any question s conce rning this matter, please contact me. I want to thank you and your team for your service to our state and for your cooperation in this regard

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Finding 1210956 (2024-029)

Material Weakness 2024

State of Mississippi

MS

Allowable Costs / Cost Principles Questioned Costs Subrecipient Monitoring § 200.303

The Department should review and enhance its procedures and internal controls to ensure that it charges expenditures to the program that are incurred within an award’s allowable period of performance. Response: The Department concurs with the finding and the need to enhance procedures and strengthen...

The Department should review and enhance its procedures and internal controls to ensure that it charges expenditures to the program that are incurred within an award’s allowable period of performance. Response: The Department concurs with the finding and the need to enhance procedures and strengthen controls over processing expenditures to ensure compliance with the awards’ period of performance. Corrective Action: The program will enhance procedures and strengthen controls to ensure expenditures presented for payment are allowable and within the awards’ period of performance. Program leadership will develop and document an internal expenditure review process to ensure a complete review of presented expenditures for payment is completed prior to submission to the agency’s Accounts Payable Department for processing. Name of contact person responsible for the corrective action: Jameshyia Ballard Anticipated date for completion of corrective action: September 30, 2026

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Finding 1210955 (2024-028)

Material Weakness 2024

State of Mississippi

MS

Eligibility Questioned Costs School Nutrition Programs § 200.303

The Department should review and update its procedures and controls to ensure that only eligible participants receive benefits under the program. Eligibility documentation should be maintained and readily available for audit. Response: The Department concurs with the finding and the need to strength...

The Department should review and update its procedures and controls to ensure that only eligible participants receive benefits under the program. Eligibility documentation should be maintained and readily available for audit. Response: The Department concurs with the finding and the need to strengthen controls over eligibility processing to ensure required documentation is obtained and maintained for each participant to support program eligibility. Corrective Action: The program will develop an internal tracking and retention system to maintain eligibility documentation for participants to ensure accessibility when needed. Documentation will be maintained in accordance with program requirements. Name of contact person responsible for the corrective action: Jameshyia Ballard Anticipated date for completion of corrective action: September 30, 2026

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Finding 1210860 (2024-002)

Material Weakness 2024

Berkeley County Public Service District

WV

Questioned Costs Cash Management Matching / Level of Effort / Earmarking

Management will monitor major programs and ensure that they are tested when necessary. The grant in question was tested during 2024.

View Audit 400206

Finding 1210816 (2024-005)

Material Weakness 2024

Town of Hollywood

SC

Reporting Questioned Costs Matching / Level of Effort / Earmarking

The Town will implement new grant management controls to ensure all transactions charged to federal awards are properly documented and retained. Anticipated Completion Date: -----3/31/2026

View Audit 400096

Finding 1210663 (2024-002)

Material Weakness 2024

Gascosage Electric Cooperative

MO

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

Gascosage Electric Cooperative Responsible Party: Luther Riddle, General Manager LRiddle@gascosage.coop Audit Period Ending: December 31, 2024 Finding #2024-002 Statement of Condition - Effective internal controls to maintain evidence of review and approval of reports with appropriate segregation of...

Gascosage Electric Cooperative Responsible Party: Luther Riddle, General Manager LRiddle@gascosage.coop Audit Period Ending: December 31, 2024 Finding #2024-002 Statement of Condition - Effective internal controls to maintain evidence of review and approval of reports with appropriate segregation of duties were not in place. The Organization concurs with the finding and management will implement procedures to ensure appropriate internal control procedures are in place for reporting. Management will implement additional internal controls to ensure appropriate segregation of duties between report preparation and review.

View Audit 399958

Finding 1210657 (2024-016)

Material Weakness 2024

Philander Smith College

AR

Student Financial Aid Questioned Costs Subrecipient Monitoring

Federal Program/ Assistance Listing Number (ALN) 84.268, 84.063, 84.007, 84.033 Finding Reference Number 2024-016 1. Finding Summary The auditor determined that Pell Grant funds were disbursed for summer enrollment without adequate documentation demonstrating that students met all required summer Pe...

Federal Program/ Assistance Listing Number (ALN) 84.268, 84.063, 84.007, 84.033 Finding Reference Number 2024-016 1. Finding Summary The auditor determined that Pell Grant funds were disbursed for summer enrollment without adequate documentation demonstrating that students met all required summer Pell eligibility criteria. As a result, the institution could not demonstrate compliance with federal requirements governing the award and disbursement of additional Pell Grant funds for summer terms. 2. Management's Position Management agrees with the finding. Management Explanation Management agrees with the finding and acknowledges that Pell Grant funds were disbursed for summer enrollment without consistently ensuring and documenting that all federal summer eligibility requirements were met prior to disbursement. 3. Root Cause Analysis The root cause of this finding resulted from insufficient supervisory review of summer Pell eligibility determinations and gaps in staff training regarding federal requirements for awarding and disbursing additional Pell Grant funds for summer enrollment. 4. Corrective Action(s) Management has added secondary review, implemented periodic internal monitoring, and conducted targeted staff training tied to updated procedures. Description of Corrective Actions The institution has added a required supervisory or secondary review to confirm summer Pell eligibility prior to processing or disbursement, implemented periodic internal monitoring and quality assurance reviews to verify ongoing compliance, and conducted targeted staff training aligned with updated summer Pell eligibility procedures. 5. Risk Mitigation (Required - Even if Disagreeing) These corrective actions reduce the risk of improperly awarding or disbursing Pell Grant funds for summer enrollment by strengthening supervisory oversight, improving staff understanding of summer eligibility requirements, and ensuring eligibility is reviewed and verified prior to disbursement. Ongoing monitoring and quality assurance reviews provide additional safeguards to identify and prevent future noncompliance. 6. Responsible Party • Office/Department: Office of Financial Aid • Title of Responsible Official: Director of Financial Aid • Name (optional): 7. Implementation Timeline • Corrective action implemented: Yes (No) • If not fully implemented, expected completion date: June 30, 2026 8. Status of Corrective Action (For Prior-Year or Repeat Findings) Fully implemented Partially implemented (Not yet implemented) Evidence of Implementation In progress, evidence is not yet available. 9. Monitoring and Sustainability Ongoing supervisory review and periodic internal monitoring will be conducted to ensure summer Pell eligibility requirements are consistently met and documented prior to disbursement. Continued staff training, standardized review procedures, and quality assurance checks will be maintained to support long-term compliance and timely identification and correction of any eligibility issues.

View Audit 399950

Finding 1210641 (2024-012)

Material Weakness 2024

Philander Smith College

AR

Student Financial Aid Questioned Costs Cash Management

Federal Program/ Assistance Listing Number (ALN) 84.268, 84.063, 84.007, 84.033 Finding Reference Number 2024-012 1. Finding Summary The auditor determined that the institution disbursed Pell Grant funds more than 10 days prior to the first day of classes, in vio]ation of federal Title IV disburseme...

Federal Program/ Assistance Listing Number (ALN) 84.268, 84.063, 84.007, 84.033 Finding Reference Number 2024-012 1. Finding Summary The auditor determined that the institution disbursed Pell Grant funds more than 10 days prior to the first day of classes, in vio]ation of federal Title IV disbursement timing requirements. As a result, the institution could not demonstrate compliance with applicable federal regulations governing the timing of Pell Grant disbursements. 2. Management's Position Management agrees with the finding. Management Explanation Management agrees with the finding and acknowledges that Pell Grant funds were disbursed earlier than permitted under federal Title IV disbursement timing requirements due to a miscalculation of the days. 3. Root Cause Analysis The root cause of this finding resulted from by inaccurate or prematurely scheduled disbursement dates, limited coordination between the Financial Aid and Business Offices on the approved disbursement calendar, and insufficient controls to ensure Pell Grant funds were released in accordance with federal timing requirements. 4. Corrective Action(s) Management will implement a standardized calendar of disbursement dates annually based on the academic calendar. Description of Corrective Actions Management will prepare an annual disbursement calendar based on the academic calendar, which will be reviewed by both the Business Office and Office of Financial Aid to ensure compliance to federal Title IV disbursement timing requirements. 5. Risk Mitigation (Required - Even if Disagreeing) These corrective actions reduce the risk of early federal disbursements by strengthening oversight, implementing a disbursement calendar, and reinforcing staff understanding of federal timing requirements. 6. Responsible Party • Office/Department: Business Office • Title of Responsible Official: Senior Accountant • Name (optional): ___ _________ _ 7. Implementation Timeline • Corrective action implemented: (Yes) No • If not fully implemented, expected completion date: June 30, 2026 8. Status of Corrective Action (For Prior-Year or Repeat Findings) (Fully implemented) Partially implemented Not yet implemented Evidence of Implementation Academic Year 2026-2027 Disbursement Calendar. 9. Monitoring and Sustainability The University will continue to prepare a disbursement calendar annually before any new year disbursements are made.

View Audit 399950

Finding 1210637 (2024-011)

Material Weakness 2024

Philander Smith College

AR

Student Financial Aid Questioned Costs Subrecipient Monitoring

Federal Program/ Assistance Listing Number (ALN) 84.268, 84.063, 84.007, 84.033 Finding Reference Number 2024-011 1. Finding Summary The auditor determined that the institution did not consistently obtain and document required verification information prior to disbursing Title IV federal student aid...

Federal Program/ Assistance Listing Number (ALN) 84.268, 84.063, 84.007, 84.033 Finding Reference Number 2024-011 1. Finding Summary The auditor determined that the institution did not consistently obtain and document required verification information prior to disbursing Title IV federal student aid for students selected for verification. As a result, the institution could not demonstrate compliance with federal verification requirements, increasing the risk that Title IV funds were disbursed before verification was completed. 2. Management's Position Management agrees with the finding. Management Explanation Management agrees with the finding and acknowledges that required verification documentation was not consistently obtained and documented prior to the disbursement of Title IV federal student aid for students selected for verification. 3. Root Cause Analysis The root cause of this finding resulted from weaknesses in verification monitoring procedures and inadequate review controls, which allowed Title IV aid to be packaged and disbursed prior to the completion and documentation of required verification. 4. Corrective Action(s) Management has implemented standardized checklists and workflows, added secondary review, provided additional training to staff, and implemented periodic internal monitoring. Description of Corrective Actions Management has implemented enhanced verification workflows and system controls to prevent packaging or disbursement of Title IV aid until verification is fully completed. A mandatory supervisory review has been established, and targeted staff training has been conducted to reinforce verification requirements. Periodic internal monitoring and quality assurance reviews will be performed to ensure on going compliance. 5. Risk Mitigation (Required - Even if Disagreeing) The corrective actions mitigate the risk of disbursing Title IV funds prior to verification completion by strengthening verification workflows, system controls, and supervisory review. Targeted staff training and ongoing internal monitoring further reduce the likelihood of premature disbursements and support sustained compliance with federal verification requirements. 6. Responsible Party • Office/Department: Office of Financial Aid • Title of Responsible Official: Director of Financial Aid 7. Implementation Timeline • Corrective action implemented: Yes (No) • If not fully implemented, expected completion date: June 30, 2026 8. Status of Corrective Action (For Prior-Year or Repeat Findings) Fully implemented Partially implemented (Not yet implemented) Evidence of Implementation In progress, evidence is not yet available. 9. Monitoring and Sustainability Management will conduct regular supervisory and periodic internal reviews of verification files to confirm that required documentation is completed prior to Title IV packaging and disbursement. Continued staff training, maintained system controls, and standardized verification procedures will be sustained to ensure long-term compliance and timely identification of any deficiencies.

View Audit 399950

Finding 1210633 (2024-010)

Material Weakness 2024

Philander Smith College

AR

Student Financial Aid Questioned Costs Subrecipient Monitoring

Federal Program / Assistance Listing Number (ALN) 84.268, 84.063, 84.007, 84.033 Finding Reference Number 2024-010 1. Finding Summary The auditor determined that the institution did not consistently obtain or maintain official transfer transcripts required to document prior academic completion and e...

Federal Program / Assistance Listing Number (ALN) 84.268, 84.063, 84.007, 84.033 Finding Reference Number 2024-010 1. Finding Summary The auditor determined that the institution did not consistently obtain or maintain official transfer transcripts required to document prior academic completion and establish Title IV eligibility in accordance with the Higher Education Act and federal regulations. As a result, the institution could not fully demonstrate compliance with Title IV student eligibility documentation requirements, increasing the risk of awarding federal aid to potentially ineligible students. 2. Management's Position Management agrees with the finding. Management Explanation Management agrees with the finding and acknowledges that official transfer transcripts were not consistently obtained or maintained to adequately document prior academic completion and establish Title IV eligibility in accordance with federal requirements. 3. Root Cause Analysis The root cause of this finding was gaps in staff training related to transfer transcript requirements and insufficient supervisory review to ensure required documentation was obtained and retained prior to the awarding or disbursement of Title IV federal student aid. 4. Corrective Action(s) Management has implemented standardized checklists and workflows, added secondary review, provided additional training to staff, and implemented periodic internal monitoring. Description of Corrective Actions Management has enhanced oversight by implementing additional supervisory review to confirm required transfer transcripts are received and documented before Title IV processing, provided targeted training to address staff knowledge gaps regarding eligibility requirements, and improved documentation practices by centralizing the collection and retention of official transfer transcripts. 5. Risk Mitigation (Required - Even if Disagreeing) The corrective actions reduce the risk of awarding or disbursing Title IV funds to ineligible students by ensuring that high school completion documentation is consistently collected, verified, and retained prior to aid processing. Enhanced supervisory review, centralized documentation practices, strengthened system controls, and ongoing staff training provide multiple layers of oversight to prevent documentation gaps and support sustained compliance with federal eligibility requirements. 6. Responsible Party • Office/Department: Office of Admissions • Title of Responsible Official: Director of Admissions • Name (optional): ________ 7. Implementation Timeline • Corrective action implemented: Yes (No) • If not fully implemented, expected completion date: Action is fully implemented, but will transition to a new automated process at a later date. 8.Status of Corrective Action (For Prior-Year or Repeat Findings) Fully implemented Partially implemented (Not yet implemented) Evidence of Implementation In progress, evidence is not yet available. 9. Monitoring and Sustainability Management will conduct ongoing supervisory and periodic internal reviews of student files to verify that official transfer transcripts are consistently obtained, documented, and retained prior to Title IV awarding or disbursement. Continued staff training, standardized documentation procedures, and strengthened system controls will be maintained to ensure long-term compliance and to promptly identify and correct any deficiencies.

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Finding 1210629 (2024-009)

Material Weakness 2024

Philander Smith College

AR

Student Financial Aid Reporting Questioned Costs

Federal Program/ Assistance Listing Number (ALN) 84.268, 84.063, 84.007, 84.033 Finding Reference Number 2024-009 1. Finding Summary The auditor identified that some students lacked required documentation ofhigh school completion or an allowable alternative in their files yet were awarded Title IV f...

Federal Program/ Assistance Listing Number (ALN) 84.268, 84.063, 84.007, 84.033 Finding Reference Number 2024-009 1. Finding Summary The auditor identified that some students lacked required documentation ofhigh school completion or an allowable alternative in their files yet were awarded Title IV federal student aid. As a result, the institution could not demonstrate compliance with Title IV student eligibility requirements, creating a risk of disbursement to ineligible students. 2. Management's Position Management agrees with the finding. Management Explanation Management agrees with the finding and acknowledges that required documentation of high school completion or an allowable alternative was not consistently maintained in student files prior to the disbursement of Title IV federal student aid. 3. Root Cause Analysis The root cause of this finding was insufficient supervisory review of student eligibility documentation and decentralized documentation practices that resulted in inconsistent collection and retention of required records. 4. Corrective Action(s) Management has implemented standardized checklists and workflows, added secondary review, enhanced system controls, and implemented periodic internal monitoring. Description of Corrective Actions The institution has taken corrective action to strengthen compliance with Title IV student eligibility requirements related to documentation of high school completion. Management has implemented standardized eligibility checklists and documented workflows to ensure required documentation is collected and verified prior to awarding or disbursing federal student aid. A mandatory supervisory or secondary review has been added to confirm eligibility and documentation completeness before processing or disbursement occurs. In addition, system controls within the Student Information System (SIS), financial aid software, and document management systems have been enhanced to require receipt and retention of acceptable high school completion documentation before Title IV funds can be awarded. Targeted staff training has been conducted to reinforce federal eligibility requirements, institutional procedures, and documentation standards. To ensure ongoing compliance, the institution has established periodic internal monitoring and quality assurance reviews of student files to verify documentation accuracy and consistency. These measures are designed to prevent recurrence of the finding and support sustained compliance with federal regulations. 5. Risk Mitigation (Required - Even if Disagreeing) The implemented corrective actions mitigate the risk of awarding or disbursing Title IV funds to ineligible students by ensuring that high school completion documentation is collected, verified, and retained prior to aid processing. Standardized workflows, enhanced system controls, supervisory review, targeted staff training, and ongoing internal monitoring collectively strengthen compliance oversight, reduce documentation errors, and promote consistent adherence to federal student eligibility requirements. 6. Responsible Party • Office/Department: Office of Admissions • Title of Responsible Official: Director of Admissions • Name (optional): _ 7. Implementation Timeline a. Corrective action implemented: Yes (No) b. If not fully implemented, expected completion date: June 30, 2026 8. Status of Corrective Action (For Prior-Year or Repeat Findings) Fully implemented Partially implemented (Not yet implemented) Evidence of Implementation In progress, evidence is not yet available. 9. Monitoring and Sustainability Management will conduct periodic internal reviews and quality assurance checks of student eligibility files to confirm that required high school completion documentation is consistently obtained and maintained prior to Title IV disbursement. Supervisory reviews, ongoing staff training, and continued use of standardized workflows and system controls will be sustained to reinforce compliance, identify issues timely, and ensure long-term adherence to federal Title IV eligibility requirements.

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Finding 1210625 (2024-008)

Material Weakness 2024

Philander Smith College

AR

Student Financial Aid Questioned Costs Subrecipient Monitoring

Federal Program/ Assistance Listing Number (ALN) 84.268, 84.063, 84.007, 84.033 Finding Reference Number 2024-008 1. Finding Summary The auditor identified that seven (7) out of sixty (60) sampled students had Title IV-created credit balances that remained on their accounts for more than 14 days wit...

Federal Program/ Assistance Listing Number (ALN) 84.268, 84.063, 84.007, 84.033 Finding Reference Number 2024-008 1. Finding Summary The auditor identified that seven (7) out of sixty (60) sampled students had Title IV-created credit balances that remained on their accounts for more than 14 days without being released to the student or parent. 2. Management's Position Management agrees with the finding. Management Explanation Management agrees with the finding and acknowledges that the identified condition resulted from the system not pulling credit balances per semester. 3. Root Cause Analysis The root cause was the absence of the system not pulling credit balances per semester. Therefore, it is a manual process to verify if the current semester aid creates a refund for current semester charges when a balance from a prior semester is rolling forward. 4. Corrective Action(s) Management has enhanced system controls and implemented periodic internal monitoring. Description of Corrective Actions To address this finding and prevent recurrence, the University is performing weekly reviews of all student accounts that had aid processed during that week. This review is important because all statements are reviewed even if a credit balance is not showing to identify if the aid for the period creates a credit for the semester despite a beginning balance. Further, the University is transitioning to a new accounting system which will identify credit by term. The new system, Colleague, which will automate the process, will be implemented in approximately 18 months. 5. Risk Mitigation (Required - Even if Disagreeing) The institution recognizes the importance of mitigating compliance risk in this area. According!y, the corrective actions described above are designed to timely identify student accounts with a refundable credit balance and future audit findings. 6. Responsible Party a. Office/Department: Business Office b. Title of Responsible Official: Senior Accountant c. Name (optional): 7. Implementation Timeline Manual corrective actions have been implemented and are ongoing as part of standard operating procedures. The automated process is anticipated to be fully in place within 18 months once the University transitions to the Colleague system. • Corrective action implemented: Yes (No) • If not fully implemented, expected completion date: Action is fully implemented, but will transition to a new automated process at a later date. 8.Status of Corrective Action (For Prior-Year or Repeat Findings) (Fully implemented) Partially implemented Not yet implemented Evidence of Implementation An example can be provided for a student with a balance who received a refund for the current semester despite not showing a credit balance. 9. Monitoring and Sustainability The University will continue its manual review process until it can be automated.

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Finding 1210621 (2024-007)

Material Weakness 2024

Philander Smith College

AR

Student Financial Aid Questioned Costs Subrecipient Monitoring

Federal Program/ Assistance Listing Number (ALN) 84.268, 84.063, 84.007, 84.033 Finding Reference Number 2024-007 1. Finding Summary The auditor identified inconsistencies in the application of Cost of Attendance (COA) budgets, indicating that COA components were not applied uniformly to students wi...

Federal Program/ Assistance Listing Number (ALN) 84.268, 84.063, 84.007, 84.033 Finding Reference Number 2024-007 1. Finding Summary The auditor identified inconsistencies in the application of Cost of Attendance (COA) budgets, indicating that COA components were not applied uniformly to students within similar categories and were not consistently supported by documentation. 2. Management's Position Management agrees with the finding. Management Explanation Management agrees with the finding and acknowledges that Cost of Attendance budgets were not applied consistently across similarly situated students. The University recognizes the importance of uniform COA application and adequate documentation to ensure accurate financial aid determinations and compliance with federal regulations and is committed to implementing corrective measures to address this issue. 3. Root Cause Analysis Office of Fiscal Affairs The root cause was the absence of standardized Cost of Attendance budget templates and documented procedures, combined with training gaps and limited supervisory review. These conditions led to inconsistent application of COA components across student categories and insufficient documentation to support the amounts used in financial aid packaging. 4. Corrective Action(s) Management is working to implement standardized workflows and periodic internal monitoring. The University has also enhanced system controls. Description of Corrective Actions To address this finding and prevent recurrence, the University has implemented standardized COA checklists and workflows to ensure consistent application of Cost of Attendance components across similarly situated students. Supervisory review has been added prior to finalizing COA determinations to verify accuracy, consistency, and compliance with federal requirements. In addition, system controls within the student information system and financial aid management software have been enhanced to support standardized COA budgets and reduce the risk of inconsistent manual adjustments. Periodic internal monitoring and quality assurance reviews have been established to assess ongoing compliance, identify variances, and support the long-term sustainability of corrective actions. 5. Risk Mitigation (Required - Even if Disagreeing) The University recognizes the importance of reducing regulatory risk associated with the consistent application of Cost of Attendance budgets. The corrective measures implemented are intended to strengthen consistency, oversight, and system-based controls in COA determinations, thereby minimizing the risk of inaccurate financial aid awards, inconsistent student treatment, and future audit findings. 6. Responsible Party • Office/Department: Office of Financial Aid • Title of Responsible Official: Financial Aid Director • Name ( optional): -------------- 7. Implementation Timeline • Corrective action implemented: Yes (No) • If not fully implemented, expected completion date: June 30, 2026 8. Status of Corrective Action (For Prior-Year or Repeat Findings) Fully implemented Partially implemented (Not yet implemented) Evidence of Implementation In progress, evidence is not yet available. 9. Monitoring and Sustainability The University will maintain ongoing oversight of Cost of Attendance determinations through periodic internal reviews and supervisory verification of COA budgets. System controls, standardized workflows, and quality assurance checks will be routinely evaluated to ensure consistent application across student categories and sustained compliance with federal requirements.

View Audit 399950

Finding 1209148 (2024-117)

Material Weakness 2024

State of Arizona

AZ

Subrecipient Monitoring Reporting Questioned Costs § 200.303 § 200.305 § 200.328 § 200.334 § 200.513

Assistance listing numbers and program names 97.024 Emergency Management Performance Grants Agency: Department of Emergency and Military Affairs (DEMA) Name of contact person and title: Keith Tagaban, Audit Supervisor Anticipated completion date: September 18, 2026 Agency’s Response: Concur The Depa...

Assistance listing numbers and program names 97.024 Emergency Management Performance Grants Agency: Department of Emergency and Military Affairs (DEMA) Name of contact person and title: Keith Tagaban, Audit Supervisor Anticipated completion date: September 18, 2026 Agency’s Response: Concur The Department of Emergency and Military Affairs (DEMA) will maintain complete, accurate, and auditable documentation to support all federal award expenditures, matching contributions, and financial reporting in accordance with 2 CFR Part 200 and applicable award terms and conditions, with records retained for a minimum of three years following submission of the final Federal Financial Report (FFR). DEMA will ensure all FFRs are reviewed for accuracy, completeness, and compliance prior to submission and will promptly correct any identified discrepancies in coordination with the federal awarding agency. The Department will implement and enforce written policies and procedures governing reimbursement requests, financial reporting, matching requirements, and record retention, including management review to ensure costs reported are allowable, allocable, reasonable, and adequately supported, and will maintain sufficient staffing and oversight to sustain ongoing compliance.

View Audit 399861

Finding 1209146 (2024-116)

Material Weakness 2024

State of Arizona

AZ

Questioned Costs Allowable Costs / Cost Principles § 200.303 § 200.334 § 200.430 § 200.513 § 200.521

Assistance listing numbers and program names 97.024 Emergency Management Performance Grants Agency: Department of Emergency and Military Affairs (DEMA) Name of contact person and title: Keith Tagaban, Audit Supervisor Anticipated completion date: September 18, 2026 Agency’s Response: Concur The Depa...

Assistance listing numbers and program names 97.024 Emergency Management Performance Grants Agency: Department of Emergency and Military Affairs (DEMA) Name of contact person and title: Keith Tagaban, Audit Supervisor Anticipated completion date: September 18, 2026 Agency’s Response: Concur The Department of Emergency and Military Affairs will maintain required documentation to support payroll costs charged to the federal program and ensure compliance with award requirements. Internal Audit will review FY2024 payroll charges for allowability and adequate support in coordination with the State Finance Office, the Emergency Management Grants Administration Office, and State Human Resources Office. Unallowable costs, if identified, will be resolved through reimbursement adjustments or repayment, as appropriate. Payroll documentation policies will be updated, and training will be provided to ensure required records are retained for the prescribed retention period.

View Audit 399861

Finding 1209144 (2024-122)

Material Weakness 2024

State of Arizona

AZ

Questioned Costs Special Tests & Provisions Material Weakness

Assistance listing numbers and program names: 93.778 Medicaid Assistance Program (Medicaid; Title XIX) 93.778 COVID-19 Medicaid Assistance Program (Medicaid; Title XIX) 93.767 Children’s Health Insurance Program (CHIP) Agency: Arizona Health Care Cost Containment System (AHCCCS) Name of contact pers...

Assistance listing numbers and program names: 93.778 Medicaid Assistance Program (Medicaid; Title XIX) 93.778 COVID-19 Medicaid Assistance Program (Medicaid; Title XIX) 93.767 Children’s Health Insurance Program (CHIP) Agency: Arizona Health Care Cost Containment System (AHCCCS) Name of contact person and title: Jeff Tegen, Assistant Director, AHCCCS Division of Business and Finance Completion date: June 30, 2025 Agency’s Response: Concur AHCCCS would like to note this matter was discovered through internal review of Office of the Inspector General (OIG) recoupment documentation and filings with Centers for Medicare & Medicaid Services (CMS). This matter was reviewed in detail by our financial management team and AHCCCS determined this was caused by a few factors: (1) staffing issues and employee turnover in all units involved in the process to return OIG recoupments to CMS. (2) A breakdown of inter and intra-departmental communication and collaboration. Actions Taken: ● Filling the related following positions that experienced turnover: Accounting Supervisor, Reporting Administrator, and 2 Accounting Specialists. ● Increased collaboration across the respective departments and divisions to ensure the federal share of all case recoupments is timely returned to CMS. ● Revised our standard work processes to include quarterly reconciliations of case recoupments among the various departments and divisions. Actions Remaining: ● AHCCCS anticipates having reported and returned the federal share to CMS for all case recoupments identified by June 30, 2025.

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Finding 1209141 (2024-121)

Material Weakness 2024

State of Arizona

AZ

Questioned Costs Special Tests & Provisions Material Weakness

Assistance listing numbers and program names: 93.778 Medicaid Assistance Program (Medicaid; Title XIX) 93.778 COVID-19 Medicaid Assistance Program (Medicaid; Title XIX) 93.767 Children’s Health Insurance Program (CHIP) Agency: Arizona Health Care Cost Containment System (AHCCCS) Name of contact pers...

Assistance listing numbers and program names: 93.778 Medicaid Assistance Program (Medicaid; Title XIX) 93.778 COVID-19 Medicaid Assistance Program (Medicaid; Title XIX) 93.767 Children’s Health Insurance Program (CHIP) Agency: Arizona Health Care Cost Containment System (AHCCCS) Name of contact persons and titles: Vanessa Templeman, Inspector General, AHCCCS Office of Inspector General Jeff Tegen, Assistant Director, AHCCCS Division of Business and Finance Completion date: December 31, 2025 Agency’s Response: Concur In fiscal year 2023, the process of holding quarterly reviews of deferred cases did not occur due to resources being diverted to focus on Strike Force activities involved in addressing the behavioral health crisis. Additionally, Office of the Inspector General (OIG) announced a re-organization in December 2023 that resulted in permanent transitions to other teams for several staff. Teams were given time to finalize cases and move items to other investigators in order to limit disruption to cases. By April 2024, after the Strike Force initiative had been unwound and the member team structure changes for personnel were finalized, the member team restarted its process of quarterly deferred case reviews. At the first review in April 2024, cases in the deferred backlog that were not completed in the timeframe set for the reviews were postponed to the next quarterly review in July. AHCCCS OIG commits to a review of the current Deferred Process and will determine areas of improvement to include timeliness for deferred case review completion, quarterly completed deferred case review reports, and required documentation for all deferred case processes.

View Audit 399861

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