Corrective Action Plans

Finding No. 2022-009 Area: Equipment and Real Property Management Views of Auditee and Planned Corrective Action Condition 1. For 5 (or 100%) transactions, no evidence of custodian signature at inception of the fixed asset was not provided. However, printed copies of the property master information record from the JD Edwards system were signed and dated by the custodian and a verifier as evidence of the most recent physical inspection in September 2022. We partially agree. This is because the Public School System is in the process of improving its standard operating procedures (SOPs) pertaining to and relating with equipment and real property management. Condition 2. 2 (a) The custodian’s name was not indicated on the property master information record from the JDE system. Evidence that custodian records were matched and updated after physical inspection was not obtained. We agree. The Public School System is already in the process of improving its standard operating procedures (SOPs) pertaining to and relating with equipment and real property management. 2 (b) The property master information record states that the asset is in working condition, however evidence obtained of a survey performed has concluded that the asset is no longer useful for PSS operations and is recommended for destruction or scrapping. The same evidence showed that the destruction/scrapping occurred in September 15, 2022. We agree. This is because the Public School System is in the process of improving its standard operating procedures (SOPs) pertaining to and relating with equipment and real property management. Anticipated Completion Date: September 30, 2024 Name of Contact Person and Title Contact Person – Arlene Lizama, Director of Finance Contact – arlene.lizama@cnmipss.org

Finding No. 2022-008 Area: Equipment and Real Property Management Views of Auditee and Planned Corrective Action Condition 1. For 5 (or 100%) transactions, no evidence of custodian signature at inception of the fixed asset was not provided. We partially agree. This is because the Public School System is in the process of improving its standard operating procedures (SOPs) pertaining to and relating with equipment and real property management. Condition 2. For 2 (or 40%) transactions identified as PS-012478-US and PS-047509-US, with a total cost of $12,636, the custodian’s name and the condition of the equipment was not indicated on the property master information record. We partially agree. This is because the Public School System is in the process of improving its standard operating procedures (SOPs) pertaining to and relating with equipment and real property management. Anticipated Completion Date: September 30, 2024 Name of Contact Person and Title Contact Person – Arlene Lizama, Director of Finance Contact – arlene.lizama@cnmipss.org

Finding No. 2022-006 Area: Allowable Costs/Cost Principles Views of Auditee and Planned Corrective Action Disagree with the finding. Condition 1. For 1 or (2%) sample, identified as employee no. 21199, evidence of fair allocation of the employee’s payroll cost was not provided. We disagree. Evidence of fair allocation document reflecting the payroll cost (amount) was provided to the Ernst & Young audit team. Condition 2. For 2 (or 40%) transactions identified as PS-067026-US and PS-078607-US with a total cost of $131,490, evidence of prior approval of the acquisition by the federal agency was not provided. We disagree. Prior approval documents of PS-067026-US and PS-078607 were provided to the Ernst & Young audit team. Anticipated Completion Date N/A Name of Contact Person and Title Contact Person – Arlene Lizama, Director of Finance Contact – arlene.lizama@cnmipss.org

Finding No. 2022-005 Area: Allowable Costs/Cost Principles Views of Auditee and Planned Corrective Action Condition 1. Disagree with the finding. The Education Stabilization Fund (ESF) of the Public System was awarded to and was designed to provide additional funding (supplement) support to the local school system (PSS) as a result of the impact of the COVID-19 pandemic. Background: On March 16, 2020 PSS suspended classroom instruction, ease central office operation to a certain level, implemented furloughs, and effectuated cost- containment initiatives, among drastic measures to mitigate the crisis brought about by the pandemic. Of the public elementary, middle, and high schools on Saipan, Tinian, and Rota, only one school - Kagman Elementary School - was provided limited instruction (during summer of 2020). Kagman Elementary School was the first to reconfigure its facilities to maintain a safe (social distancing) facility for in-person student learning. The $802,789 as cited (Condition 1) was an ESF-approved and sanctioned funding allocation. However, the change in funding source was initiated after the payroll processing. And in order to reflect the correct funding source, the JE adjustment was initiated. Due to JE limitation these entries are not reflected to “subsidiary” ledgers. Condition 2. Disagree with the finding. 2. Retention incentive The Public School System maintains that both the Education Stabilization Fund (ESF) and American Rescue Plan Act (ARPA) spending plans were approved by the federal grantor. The Retention Incentive Plan in question is a component of both ESF and ARPA spending plans. Further, an additional communication from the U.S. Department of Education affirms the PSS authority in the ESF and ARPA spending plans, including the Retention Incentive Plan in question. Ernst and Young in its 2021 audit report (issued on April 26, 2023) on the same condition (issuance of retention incentive, see page 66) does acknowledge that “PSS sought and received prior grantor approval.” Background: The Commissioner of Education has the sole expenditure authority vested as the chief state school superintendent to come up and produce a spending plan. As such, the Commissioner of Education proposed the funding disbursements and presented it with the State Board of Education. The BOE is the governing body of PSS. The BOE approved the COE’s spending plan. Condition 3. PSS agrees with the finding. However, as of FY2023, the Federal Programs Office has instituted a stringent Standard Operating Procedure for seeking prior approval for equipment costing over $5,000.00. Anticipated Completion Date: N/A Name of Contact Person and Title Contact Person – Arlene Lizama, Director of Finance Contact – arlene.lizama@cnmipss.org

Finding No. 2022-004 Area: Allowable Costs/Cost Principles Views of Auditee and Planned Corrective Action Condition 1. Disagree with the finding. For the 25 or (63%) samples, Notice of Personnel Action (NOPA) forms were not provided for differential payments paid to employees. We disagree. There is no need for the issuance of Notice of Personnel Action (NOPA) nor is it required for the issuance and or granting of pay differential. The PSS is granted by virtue of the State BOE Policy, Rules and Regulation that in paying pay differential the requesting department should/can only issue a memorandum (memo), and must be fully signed by and approved by the Commissioner of Education, before it is provided to the Payroll division of the PSS Finance department for the payment of pay differential. Condition 2. For 2 or (40%) equipment transactions identified as PS-049031-US and PS-055730-US which were acquired within fiscal year 2022 totaling $14,299, evidence of prior approval was not provided. We agree. However, as of FY2023, the Federal Programs Office has instituted a stringent Standard Operating Procedure for seeking prior approval for equipment costing over $5,000.00. Anticipated Completion Date: N/A Name of Contact Person and Title Contact Person – Arlene Lizama, Director of Finance Contact – arlene.lizama@cnmipss.org

Finding 2022-005: Activities Allowed, Allowable Costs, and Period of Performance – Material Weakness. Management Response: We are reviewing our internal controls (SOPs, Operational Manuals and Handbooks), including the document retention policy to assure retrieval. Interdepartmental review of the program contract and the Operations Manual will be held to assure understanding of allowable expenses. 1. Managerial training will be administered to assure Program expenditures are allowable. 2. Operations Manual is being updated to have a process that insures approval workflows for allowable costs. 3. Accounting Policies & Procedures Manual is being updated to improve internal controls & show clear process of compliance over expenditures.

FEDERAL AWARD PROGRAMS AUDIT FINDING Material Weakness in Internal Control over Compliance Finding (2022-003) Recommendation: We recommend the Association continue to design and implement controls, including levels of review, to ensure reporting is prepared using accurate financial information and in accordance with reporting requirements. Planned Corrective Action: The Association will ensure the appropriate grouping of Medicaid supplemental payments when calculating Total Revenue/Net Charges from patient care. One of the supplemental payments is related to the hospital's eligibility to receive the associated payment under the Medicaid Rural Disproportionate Share Hospital (ROSH) Program or the Rural Financial Assistance Program (RFAP). The RFAP is based upon a fixed sum of money. Therefore, the annual RFAP distribution received by a hospital represents an amount proportional to the hospital's contribution for providing indigent and Medicaid care as compared to all other RFAP eligible rural hospitals and is calculated in accordance with Florida statute. In addition, the Directed Payment Program (OPP}, as approved by the Florida legislature in 2021, provides funding for hospitals that provide inpatient and outpatient services to Medicaid managed care enrollees. This program is intended to address the shortfall to hospitals by collecting Intergovernmental Transfers (IGTs) and Local Provider assessments (LP) to draw down Federal Medicaid Matching dollars.

The organization implemented procedures to ensure that the financials records are clsoed and available for audit in a timely basis to be able to meet the filling deadline.

Recommendation:We recommend management and the board of directors should review reporting frequently to make sure that they are complying with the requirements. Management Response: We agree with the recommendation and the record retention policy that was adopted on November 14, 2022 should prevent this from happening in the future.

Material Weakness in Internal Control over Compliance: See findings 2022-2, 2022-3, 2022-4, 2022-5, 2022-6, 2022-7, 2022-9, 2022-10

Material Weaknesses in Internal Control over Compliance: See findings 2022-2, 2022-3, 2022-4, 2022-5, 2022-7, and 2022-9

Recommendation: We recommend the Company should implement a timesheet protocol for all employees to complete on a weekly basis. Action Taken: We agree with the recommendation, we have hired a CPA as third-party bookkeeper; the bookkeeper has implemented a timesheet program for all time allocated to grants for each employee to follow.

Recommendation: We recommend management should designate one person to oversee the recertifications and inspections are being performed in a timely manner. Furthermore, management should ensure no HAP payments are issued for units that have not passed HQS housing inspections. Explanation of disagreement with audit finding: There is no disagreement. Action taken in response to finding: The Authority will designate one person to oversee the recertifications and inspections are being performed in a timely manner. Name of the contact person responsible for corrective action: Dontrelle Young Foster, President & Chief Executive Officer Planned completion date for corrective action plan: We expect to have the finding resolved by issuance of next year's audit.

Planned Corrective Action: We will expand our existing purchasing procedures into a fully documented procurement policy that meets the standards set out in 2 CFR Part 200. Name of Contact Person: Rachel Watson, Business Office Director/Controller, watson.rachel@occ.edu Anticipated completion date: June 30, 2024

Management accepts the recommendation. Corrective Action Taken: The organization has since implemented additional controls to monitor subrecipients' use of American Rescue Plan federal awards in 2022 which include an addendum, signed and adopted May 2023, to the subgrant agreement to ensure the subrecipients provide invoices and financial reports as well as programmatic reports every 6 months to ensure the organization and subrecipients' compliance. The organization has updated our subgrant agreement to ensure an appropriate monitoring process is included for future cycles. In addition, we have established clear staff roles for monitoring subrecipient reporting compliance. Given the additional systems in place, we do not anticipate an issue with subrecipient monitoring and oversight moving forward. Anticipated Completion Date: April 1, 2024

Recommendation: We recommend the Hospital design controls to ensure documentation is completed timely and sufficiently on how costs are necessary to respond to COVID-19. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Management has identified that the Hospital has more than a sufficient amount of lost revenues related to COVID-19 to offset this difference. Action taken in response to finding: The Hospital will ensure that controls are put into place to capture Covid specific costs in accordance with HHS guidelines. Name of the contact person responsible for corrective action: Barry Mandell, VP Special Projects. Planned completion date for corrective action plan: April 1, 2022

Views of responsible officials and planned corrective action: The Authority experienced significant turnover in employees during the year and as a result certain processes were not followed and source documents were misplaced or destroyed. Management agrees with the Auditors' finding and has hired a new Executive Director who will implement the required safeguards and ensure that the Authority follows it’s the Regulatory Agreements related to the Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Projects and the HUD compliance requirements to remedy the aforementioned deficiencies. Leonard Spicer, Executive Director, is responsible for implementing this corrective action by December 31, 2023.

Views of responsible officials and planned corrective action: The Authority experienced significant turnover in employees during the year and as a result certain processes were not followed and source documents were misplaced or destroyed. Management agrees with the Auditors' finding and has hired a new Executive Director who will implement the required safeguards and ensure that the Authority follows its Section 8 Administrative Plan and the HUD compliance requirements to remedy the aforementioned deficiencies. Leonard Spicer, Executive Director, is responsible for implementing this corrective action by December 31, 2023.

Reference Number 2022-004, 2022-005, and 2022-006 Finding summary: These three findings all related to specific provider relief fund reporting of lost revenues by the Medical Center. The Medical Center experienced turnover in key accounting staff during the start of 2023 which resulted in the updated option iii reporting for lost revenues. To be modified. The current staff modified the method of calculating loss revenues from the Phase 1 reporting and were unaware of the potential impact on previously reported funding. Errors were also noted in the accumulation of data and in the reporting which was due to inadequate control processes surrounding the review and approval of the computation by someone independent of the calculation process. Corrective Action Plan: We do not anticipate having to complete a future provider relief fund reporting submission. However, for any future federal grant reporting requirements we will implement a process to have an independent individual review the reporting information along with supporting documentation prior to submission of the grant reporting form. The independent review will be documented in writing as to the date and time of the review and approval. Anticipated Completion Date: This will be implemented with the next federal grant reporting.

Statement of Condition: The Department of Health and Human Services Appropriations Act 2022 restricts the amount of salary to Executive Level II of the Federal Executive pay scale for a full time 12 months total compensation for the grant period from March 2022 to February 2023. Correction Action Planned for 2022-006: The salary of our executive director has consistently adhered to established limits, and our Program and Director of Finance, underscoring the effectiveness of our internal controls, swiftly identified any anomaly. Anticipated Completion Date June 2023

The Organization has developed an action plan to conduct time studies on staff working in program areas supported with federal funding resources. Staff training will be provided to the departments on proper payroll documentation. Time studies will be conducted twice annually. Proper documentation of allowable payroll expenditures will be submitted monthly. Signed documents will be retained on file by the department.

CORRECTIVE ACTION PLAN FOR AUDIT FINDING AUDIT FINDING 2022-061 Finding: U.S. Department of Health and Human Services Children's Health Insurance Program (CHIP), 93.767 Medicaid Cluster: State Medicaid Fraud Control Units, 93.775; State Survey and Certification of Health Care Providers and Suppliers (Title XVIII) Medicare, 93.777 Medical Assistance Program (Medicaid; Title XIX), 93.778 Eligibility Material Weakness in Internal Control over Compliance Title 42 Public Health section 435.403 State Residence provides that the State must provide Medicaid to eligible residents of the State, including residents who are absent from the State, except in cases where another state has determined that the person is a resident there for purposes of Medicaid. The Medicaid State Plan provides that the State has an eligibility determination system for data matching through the Public Assistance Reporting Information System (PARIS). The information that is requested is to be exchanged with states and other entities legally entitled to verify Title XIX applications and individuals eligible for covered Title XIX services consistent with applicable PARIS agreements. The State will transmit and receive data quarterly (February, May, August, and November). The State enrolls beneficiaries on a mandatory basis into managed care entities (managed care organizations and/or primary care case managers) in the absence of certain allowable waivers. The State contracts with managed care organizations and reimburses them for capitation payments. PARIS data was not utilized by the Division of Health Care Financing and Policy (DHCFP) or the Division of Welfare and Supportive Services (DWSS) to monitor residency changes to determine when managed care benefits needed to be terminated because the beneficiary was a resident of another state for Medicaid purposes. DHCFP and DWSS did not have internal controls in place to effectively communicate the PARIS data between the two agencies to ensure managed care benefits were terminated when appropriate. Individuals are enrolled in Medicaid (and CHIP) plans in multiple states and benefits are not being terminated timely. Therefore, the State of Nevada is paying capitation payments to managed care organizations, when the benefits should have been terminated. Projected questioned costs are $12,743,890 for Medicaid and $186,062 for CHIP. No sampling was used. The PARIS data was obtained and examined in total. The PARIS data included 56,892 participants with dual enrollment. Of those 56,892 participants, 9,722 participants were enrolled in another state after the State of Nevada. The projected questioned costs were estimated by performing the following: • Identifying individuals who enrolled in another state after they had enrolled in Nevada (termination date for Nevada). • Estimating a weighted average capitation payment based on demographics that determine the payment amount. • Applying the weighted average capitation payments from the termination date through June 30, 2022 to determine the total projected questioned costs. • The total projected questioned costs were then allocated between Medicaid and CHIP using participant counts in each plan between the ages of 0-18. Participants older than 18 were allocated to Medicaid. The allocated projected questioned costs were then multiplied by a weighted average Federal Medical Assistance Percentage (FMAP) to determine the final projected federal questioned costs. Recommendation: We recommend DHCFP and DWSS implement internal controls to effectively communicate the PARIS data between each other and to ensure managed care benefits are terminated when appropriate. Agency Response Does the Agency Agree with Finding?: Yes Additional Comments: None. Corrective Action Taken or To Be Taken Action: The Division is in the process of updating its policies and procedures for its Public Assistance Reporting Information System (PARIS) data matching process, which occurs on a quarterly basis (i.e., once every February, May, August, and November). Currently, the process is primarily a manual caseworker process conducted by caseworker staff at DWSS. However, in many states; this activity is an automated process and considered a program-integrity function of the Medicaid program rather than an eligibility function. Nevada agrees with this practice and intends to implement an automated process, while transitioning the PARIS data matching process to its program-integrity unit at the Division. To do this, the Division will be procuring a vendor to establish a Surveillance and Utilization Review section (SUR) data system, which will include the PARIS data matching process, with new federal funds from the American Rescue Plan Act (ARPA). DHCFP has started the Request for Proposal (RFP) process for this new SUR Data System. DHCFP anticipates a contract start date of January 1, 2024 and an estimated implementation date of December 31, 2024. By automating and streamlining this process in the future, Nevada Medicaid aims to increase the state's capacity to act more quickly on eligibility redeterminations that stem from a PARIS data match finding. In return, this will allow the program to adjust enrollment and payments to managed care plans, more quickly. This adjustment process is fully automated in the Division's Medicaid Management Information System (MMIS) which was certified by CMS in May of 2019. Date of Completion or Estimated Completion: December 31, 2024 Department or Agency Responsible for Corrective Action Plan Agency: Contact: Department of Healthcare Financing and Policy Russ Steele, Audit Manager 1000 E William St., Suite 110 Carson City, NV 89701 (775) 684-3609 rsteele@dhcfp.nv.gov Signature of Sandie Ruybalid, Deputy Administrator

For any construction or building improvements requiring the use of contractors in the future, management will discuss adherence to the Davis Bacon Act regarding prevailing wages with the contractors and obtain documentation from the contractors demonstrating compliance with the Act.

FINDING 2022-006 Finding Subject: COVID-19 - Education Stabilization Fund - Allowable Costs/Cost Principles Summary of Finding: Finding: Documentation for 3 employees was not available to verify the contract amounts. Recommendation: Documents be retained to support amounts paid. Contact Person Responsible for Corrective Action: Kareemah Fowler, Assistant Superintendent of Business and Finance Contact Phone Number and Email Address: (574) 393-6088; kfowler@sbcsc.k12.in.us Views of Responsible Officials: We disagree with the finding. Explanation and Reasons for Disagreement: While we agree that the single source document used by the State to validate a teacher’s contract was not available for 3 employees. We provided sufficient alternate documents that would allow the State to validate the contract amount being paid, and whether the proper employees were paid from or should have been paid from the Education Stabilization Funds. The documents provided sufficient data to support the questioned cost of $26,207 outlined in the finding. We will be working with our software vendor to rectify the glitch that prevented us from providing the documentation requested by the State for future audit. Description of Corrective Action Plan: We will be working with our software vendor to rectify the glitch that prevented us from providing the documentation requested by the State. Anticipated Completion Date: January 2024

FINDING 2022-003 Finding Subject: Title I Grants to Local Educational Agencies - Allowable Costs/Cost Principles Summary of Finding: Finding: Documentation for 10 employees was not available to verify the contract amounts. Recommendation: Documents be retained to support amounts paid. Contact Person Responsible for Corrective Action: Kareemah Fowler, Assistant Superintendent of Business and Finance Contact Phone Number and Email Address: (574) 393-6088; kfowler@sbcsc.k12.in.us Views of Responsible Officials: We disagree with the finding. Explanation and Reasons for Disagreement: While we agree that the single source document used by the State to validate a teacher’s contract was not available for 10 employees. We provided sufficient alternate documents that would allow the State to validate the contract's amount being paid, and whether the proper employees were paid from or should have been paid from the Title I funds. The documents provided sufficient data to support the questioned cost of $203,488 outlined in the finding. We will be working with our software vendor to rectify the glitch that prevented us from providing the documentation requested by the State for future audit. Description of Corrective Action Plan: We will be working with our software vendor to rectify the glitch that prevented us from providing the documentation requested by the State. Anticipated Completion Date: January 2024