Corrective Action Plans

c. Compliance will assess each file’s compliance with local, state, and federal guidelines. They will

document any issues or discrepancies found and assign appropriate corrective actions.

d. Corrective actions for compliance issues identified during review will result in the development of

an action plan for one or more staff members. The plan will include steps to rectify issues, assign

responsibility, and set deadlines for resolution.

e. Reporting of finding of each quality control check will be prepared and highlight noncompliance,

recommendations for improvement and document corrective actions taken.

By implementing a Quality Control Plan, the program aims to address inconsistencies in file processing and ensure

that all files related to the Comprehensive Energy Assistance Program (CEAP) comply with local, state and federal

guidelines.

Name of Responsible Individual: Sarah Christoffersen, Interim Director of Financial Aid Corrective Action: An incorrect date was used to process one student’s Return of Title IV (R2T4) calculation. Training has been provided to financial aid staff in properly performing the R2T4 calculations and a report is being run several times a month to identify possible data entry errors in R2T4 calculations. Anticipated Completion Date: Completed

There is no disagreement with the audit finding. The District’s Grants Manager will collaborate to ensure all program equipment and property purchases exceeding $500 involving federal monies are appropriately tracked.

Management agrees with the finding and will begin an independent review of each tenant file to include examination of proof of disability paperwork to determine if there are any discrepancies and take corrective measures. Leasing office staff will undergo additional HUD 811 training regarding the initial and recertification process. Additionally, management is staffing the property with a dedicated property manager that will be responsible for reviewing tenant files for compliance with HUD procedures including eligibility requirements and ensure supporting documentation is maintained in each tenant’s file prior to signing new or amended leases. Management has requested proof of disability from the tenant that satisfies HUD guidelines and will not renew lease if it is not received. The training and file review will be completed by November 30, 2023. If the tenant does not produce proof of disability their lease will not be renewed on May 11, 2024.

Criteria: The Institution must verify that the student with Verification code V4 or V5 has a high school completion status and has signed an Identity of education purpose statement. The University concurs with this finding and will adhere to the corrective action plan. Corrective Action: Individual files are being created and stored in a safe place during and after verification is completed. In addition, a digital copy is being placed in cloud storage. Responsible Person(s): Robert Merino, Executive Director jrmerino@vuu.edu 281 795-6190. Planned Date of Completion of Corrective Action: December 31, 2023.

Criteria: The Instituion must verify that the student remains eligible to receive financial aid prior to disbursements of funds. From appendix A of compliance supplment: Student must maintain good standing, or satisfactory academic progress (34CFRs668.16, 668.32(f), 668.34, 690.75, 675.9, 676.9, 685.200, 686.11, 20 USC 1070h; 42 CFR 57.306; 42 USC 293a(d)(2)). Satisfactory academic progress (SAP) is defined as Maintenance of satisfactory progress (2.0 GPA). The University concurs with this finding and will adhere to the corrective action plan. Corrective Action: The audit for FY22 was not finalized until June 27, 2023. The plan date for correction for this finding was December 31, 2023. Therefore, the plan was not realized due to the timing of completion of the FY22 audit. Now that the FY23 audit is completed, the Finanical Aid Team will print a report of communication sent to students who have lost their eligibility or are at risk of losing their eligibility at the end of each semester. The report will be placed in a secure location for documentation. Responsible Person(s): Robert Merino, Executive Director jrmerino@vuu.edu 281 795-6190. Planned Date of Completion of Corrective Action: December 31, 2023.

Management has paid back the excess management fees and has updated their calculation for future payments.

Management is appealing to HUD regarding the required deposit. Funds are not currently available to make the prior year required deposit.

The South Carolina Department of Employment and Workforce (SCDEW) immediately recognized the increased fraud risk presented by the federal pandemic programs. In an effort to deter this obvious fraud threat, SCDEW initially informed every applicant for federal pandemic benefits that they might be required to provide proof of their employment or self-employment at a future time. The USDOL, however, ordered SCDEW to remove this notification because, in the words of one USDOL representative, such a warning might deter a claimant from applying for federal pandemic benefits. USDOL subsequently issued guidance prohibiting states from requiring proof of employment or self-employment as an eligibility requirement to receive federal pandemic benefits. Therefore, all a fraudster had to do to receive federal benefits was simply tell a state they were unemployed as a result of the COVID-19 pandemic. SCDEW was prohibited from requiring that fraudster to prove that they were even employed, let alone that they were unemployed because of the pandemic. Many of the items identified as paid fraudulent claims were caused by SCDEW’s compliance with the USDOL guidelines. SCDEW complied with this guidance, even though it disagreed with USDOL’s highly technical parsing of federal law, and SCDEW advocated for Congress to amend the law to clearly establish commonsense fraud protections. While awaiting Congressional action, SCDEW implemented numerous fraud detection and prevention tools and strategies to minimize the potential fraud exacerbated by lax federal requirements. Unfortunately, Congress did not amend the law until late December 2020. As a result, eligibility determinations made by SCDEW prior to the law change followed the federal guidance for this pandemic funding; however, to meet federal and state expectations regarding the quick payment of federal pandemic benefits, the federal policies and procedures SCDEW was forced to adopt were not adequate to completely prevent fraudulent claims. SCDEW continues to review, monitor, and enhance eligibility processes and procedures to prevent and detect fraudulent claims. We also updated our internal controls to help mitigate future fraudulent claims. The COVID pandemic created unprecedented challenges for every state workforce agency due to the combination of historic claim volume, the availability of a staggering amount of federal money, and new programs with lax eligibility and verification requirements that had to be implemented quickly, despite often changing federal guidance. These factors created a perfect storm for sophisticated fraudsters to exploit. In response, SCDEW took numerous aggressive steps. In mid-2020, SCDEW required applicants to provide copies of their driver’s license or passport to prove their identity before receiving benefits. SCDEW also implemented identity verification questions through Lexis Nexis that every claimant had to pass before processing a claim. This was further enhanced in March 2021, when South Carolina was one of the first states to implement digital identity verification through ID.me. SCDEW also implemented reCAPTCHA to prevent against bot attacks, implemented new data sharing agreements, and increased the number of staff dedicated to investigating fraudulent claim activity to over fifty at the peak of the pandemic programs. SCDEW continuously reviews its fraud detection and prevention activities to stay ahead of emerging fraud schemes. Since the height of the pandemic, SCDEW has increased its data crossmatching, partnered with the State Law Enforcement Division to have a financial fraud investigator dedicated to unemployment insurance fraud, and made numerous enhancements to its computer systems to combat fraud and preserve the integrity of the unemployment insurance system. Per USDOL data, the agency had the twelfth lowest improper payment rate out of fifty-three programs during the year ending September 30, 2024. For more comprehensive explanation and response, please see August 26, 2024, letter attached from Paul Famolari, Assistant Executive Director of Unemployment Insurance. The Agency’s contact person responsible for the corrective action plan is Jacquelyn Carlen, CFO. The completion date of the corrective action plan was June 20, 2021, and is ongoing.

The Tribes, in collaboration with the Interim CFO, will review and verify indirect cost calculations to ensure accuracy and compliance with the approved indirect cost rate agreement. James Russ, Tribal Business Administrator, Wendy Wilson, Interim CFO and Sonia Horne, Grants and Contracts Accountant December 31, 2025

The Tribes, in collaboration with the Interim CFO, will review cash flow projection and monitoring processes to strengthen management of operating and grant funds. The Tribes will obtain external funding, as needed, to meet general fund and reimbursement grant cash needs and to reimburse advance-funded grants for any interfund borrowing incurred. General fund budgets will be evaluated to ensure adequate cash is available for planned expenditures, and procedures will be enhanced to improve the timeliness of billing and collection for reimbursement-based grants. James Russ, Tribal Business Administrator, Wendy Wilson, Interim CFO and Sonia Horne, Grants and Contracts Accountant December 31, 2025

The Tribes will ensure compliance with procurement policies by reinforcing procedures to verify suspension and debarment requirements prior to entering into contracts that exceed the applicable threshold. The Procurement Department will maintain supporting documentation for all bid processes or sole source justifications to ensure adherence to federal and tribal procurement standards. James Russ, Tribal Business Administrator, Wendy Wilson, Interim CFO and Sonia Horne, Grants and Contracts Accountant December 31, 2025

Finding Number: 2022-004 Condition: The Organization was unable to provide supporting documentation to substantiate the allowability and accuracy of the expenses and lost revenue submitted in the portal. Planned Corrective Action: Company is an emergency services (ambulance, first responder, and was instrumental in the administration of the monoclonal antibodies) – healthcare company and was during the pandemic. Company was able to provide general ledger information by personnel classification in aggregate monthly with percentages related to the Covid pandemic. Company changed payroll companies in June 2022 from Trion to DM Payroll – where we were unable to access the payroll registers by personnel name. Medstar has full access to payroll registers through DM Payroll. Contact person responsible for corrective action: Lalainia Budzynowski, VP of Finance Anticipated Completion Date: 06/30/2022 - Completed

Finding No.: 2022-046 AL Program: 97.039 - Hazard Mitigation Grant Program Area: Cash Management Questioned Costs: $2,687,277 Contact Person(s): Patrick Guerrero, Governor’s Authorized Rep., PAO Corrective Action Plan: Condition 1: HMGP respectfully disagrees with this finding. According to 31 CFR part 205, which is the default procedure if a Treasury-State Agreement (TSA) is not formally in effect, it is permissible and standard practice for a reimbursement check to clear after the disbursement request date, provided the subrecipient has submitted proof of prior payment with local funds. All checks in the samples tested are from local funds and all documents attached verified the expenses. Reimbursable funding is a recognized funding technique under 31 CFR 205.12(b)(e). This technique means that a Federal Program Agency transfers federal funds to a state after that state has already paid out the funds for Federal assistance program purposes and provided all necessary documentation. HMGP’s process operates under this reimbursement methodology: subrecipients incur costs using local funds first, then submit required documentation to HMGP for reimbursement. Consequently, the timing of reimbursement payments clearing after the request date is an inherent and necessary characteristic of this system. In absence of the TSA, the CNMI adheres to this prescribed default and the reimbursement method procedures are acceptable under the default. All expenses were processed, recorded, and supported by documentation and shows that the expense has initially been paid by non-federal, local government funds, had been processed through Munis on a reimbursement basis, and was processed no later than 30 calendar days after the reimbursement request was received. The finding suggests a deficiency, HMGP’s procedures are standard and compliant practice when operating under a reimbursement system and the default procedure. Although HMGP does believe that the current process meets federal and FEMA requirements, HMGP will develop and document a formal written procedure clearly outlining the expenditure timing process under the reimbursement system. This procedure will explain how costs are verified as incurred and demonstrate compliance with applicable federal and FEMA standards for fund control and accountability. Provide additional clarification and support documents to the auditor, if requested. Proposed Completion Date: September 30, 2025.

Finding No.: 2022-045 AL Program: 97.039 - Hazard Mitigation Grant Program Area: Allowable Costs/Cost Principles Questioned Costs: $99,924 Contact Person(s): Patrick Guerrero, Governor’s Authorized Rep., PAO Corrective Action Plan: The Hazard Mitigation Grant Program (HMGP) agrees with this finding. During the audit submission process, HMGP provided the support documents for the journal entries and reversals associated with the $99,923.27 to the auditor, as requested. However, it was only upon receiving this audit finding # 2022-049, that the discrepancy of a duplicate audit drawdown was called into question. HMGP’s ledger for this project as well as the Munis drawdown history does not indicate a remaining balance of $99,923.73 and the project related to this finding has already been closed out. To address this audit finding that HMGP received this last week on September 17th, HMGP reached out to the Department of Finance to provide related documents for the drawdowns. Based on the documents provided by DOF, the questioned cost was not a direct result of the duplicate drawdown but as a result of the reverse journal entries made by Tyler Munis staff in an effort to correct the duplicate drawdown. HMGP accurately completed all required steps to process and provided the necessary justification to process a total of $99,923.73 for professional services and submitted it to DOF. Based on the supporting documents, the $99,923.73 was comprised of: • $53,451.01- under Request for Payment Application #11, letter reference # GAR22-HM-005 received by DOF on 10/18/2021 and requested to be charged to M142352.62060. • $46,472.72- under Request for Payment Application #12, letter reference # GAR22-HM-031 received by DOF on 11/05/2021 and requested to be charged to M142352.62060. Both HMGP payment application requests show the project string was meant to be charged to 62060 which stands for Professional Services and was submitted to DOF for processing. Since the new Munis financial system portal was launch in the CNMI a month prior, HMGP personnel were not able to enter transactions directly, unlike the current process. However, when the transaction was processed on Munis, it was entered in by a Tyler Munis representative, as identified by the staff initials SMD, who was assigned to assist DOF employees with data input during the transition period and, according to the Munis transaction history, accidentally entered the debit for the $99,923.27 under the Construction project string instead of Professional Services on 12/2/2021. On 12/13/2021, SMD credited the $99,923.27 back to Construction and debited $99,923.27 to Professional Services with Journal entry # 2125. The Munis transaction history also shows various entries and reversals made under the project account that serve to correct the same journal error. HMGP personnel would not be able to review the transactions entered prior to posting, and based on the transaction logs, even after the transactions were posted, HMGP would see that those involved in processing the transactions corrected their errors. Additionally, the supporting documents associated with the drawdowns on Munis display a bank statement with a lumpsum total of various project accounts. Furthermore, most of the journal entries during the time in question either contained the same supporting documents or indicated “access denied” when selected by HMGP personnel with Munis access. The document provided to HMGP on 9/24/2025 indicated the final two transactions related to this expense was entered by Tyler Munis staff on August of 2022. In an effort to reverse the duplicate drawdowns that occurred in Professional Services, SMD reversed the $99,923.27 from professional services labeled as "REV JE 2125 DONE IN ERROR". Journal Entry (JE) 2125 refers to the debit they initially made on 12/13/2021. This credit effectively canceled out and corrected one of the two drawdowns that occurred within the Professional Services Project String. However, on the same day, SMD made a second journal entry reversal under the Construction project string with an identical PA journal comment ""REV JE 2125 DONE IN ERROR."" It is unclear as to why this transaction occurred given that original error under construction was made and corrected on December 2021. Since this incorrect journal entry was made as a debit to construction and the correct journal entry was made as a credit to professional services, the net draw would have been $0. Since $0 worth of funds were paid out and no check was cut as a result, this additional debit would not have been conspicuous to HMGP or the DOF staff. HMGP is prepared to provide the additional documentation upon request. Additionally, acknowledging that the second debit to construction in August of 2022 for $99,923.73 was recorded and was not corrected for this project, HMGP will work with DOF to correct the journal entry and return the funds to FEMA. To address the finding, a significant action step already taken is the transition that occurred in 2024 for agencies to initiate their own drawdowns. This drawdown process ensures HMGP’s direct oversight of all expenditures moving forward to reduce the risk of future duplications. HMGP created an internal drawdown tracker upon DOF’s transition to agency-initiated drawdown requests for 2024 expenses to present. HMGP will work with DOF to correct the journal entry on Munis in relation to the questioned cost and process the return of funds to FEMA. HMGP will create a tracker for all requested transactions made to DOF, such as reversals or corrections if needed as that function cannot be completed on Munis by HMGP. HMGP will review the tracker on a bi-weekly basis to ensure that all MUNIS journal entries and transfers related to HMGP to ensure expenditures are completed accurately and on a timely basis to avoid future misclassifications or duplications. HMGP will continue to ensure that all payments are correctly coded and submitted into Munis with the appropriate documentation and supporting details. HMGP will update the financial management portion of the HMGP standard operating procedures to reflect these action items. Proposed Completion Date: September 30, 2026

Finding No.: 2022-044 AL Program: 97.036 - Disaster Grants - Public Assistance (Presidentially Declared Disasters) Area: Subrecipient Monitoring Questioned Costs: $1,540,330 Contact Person(s): Patrick Guerrero, Governor’s Authorized Rep., PAO Corrective Action Plan: Condition 1: The Public Assistance Office agrees with this finding and acknowledges that, as the pass-through entity, we are responsible for monitoring subrecipients. The Public Assistance Office will strengthen monitoring procedures to ensure compliance with 2 CFR 200.332(e). Beginning September 2025, PAO has begun conducting biannual risk assessments. The PAO will also strengthen documentation and audit trails by maintaining monitoring checklists, review notes, and communications in subrecipient files. Proposed Completion Date: Ongoing Condition 2: The Public Assistance Office agrees with this finding and acknowledges that, as the pass-through entity, we are responsible for monitoring subrecipients. The Public Assistance Office will strengthen monitoring procedures to ensure compliance with 2 CFR 200.332(g). Beginning September 2025, PAO has begun conducting biannual risk assessments. Proposed Completion Date: Ongoing