Corrective Action Plans

Finding 2024-001: Special Tests and Provisions – CFDA# 94.006 (AmeriCorps State and National): Living Allowance Maximum Threshold Exceeded Audit Finding: Colorado Youth For A Change can only pay AmeriCorps member a living allowance that does not exceed the maximum living allowance threshold per the Uniform Guidance and grant guidelines. In our audit, we found that twenty AmeriCorps members were paid a living allowance that exceeded the maximum threshold by $1,255 individually, and $25,100 in aggregate. This constitutes a violation of federal grant guidelines and is considered an unallowable cost, requiring corrective action and potential reimbursement to the funding agency. Audit Recommendation: We recommend Colorado Youth For A Change to compare their living allowance calculations to the annual maximum threshold amount to ensure no AmeriCorps members are paid a living allowance in excess of the annual maximum threshold amount. Management’s Response and Corrective Action Plan: Colorado Youth For A Change acknowledges the finding and recommendation. Living allowances for the 25-26 program year have been double-checked against the current NOFA and have been confirmed to be under maximum requirements. An annual process for this action will be instituted. Contact and Completion Date: Mary Zanotti (maryz@youthforachange.org) is the primary contact, and the Executive Director at Colorado Youth For A Change. The correction action is expected to be resolved before the end of the next fiscal year-end of December 31, 2025.

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The RIEMA Recovery staff will conduct an additional review of all projects prior to obligation including both small and large projects. This review will include not only that the state required documentation is included but will also review the FEMA final validation report submitted with the project. We acknowledge the errors which were reported by the State audit review of project number 694201 for federal disaster declaration DR-4505-RI. The agency will contact the Office of Housing and Community Development of the finding and they will be required to reimburse FEMA the unallowable costs. Anticipated Completion Date: RIEMA is implementing this immediately for all project reviews. Contact Person: Lawrence Macedo, Recovery Branch Chief, Rhode Island Emergency Management Agency lawrence.macedo@ema.ri.gov

2024-065a: Rhode Island did not participate in the February 2024 PARIS interstate match due to a file issue that has since been addressed in April 2024. The May and August 2024 PARIS matches were suspended at the Federal level for all States due to an outstanding computer matching agreement between the DoD and HHS/ACF. Enhancements to existing PARIS Interstate match logic are scheduled to run as planned for fall/winter 2025. EOHHS completed implementation of an interface on 3/5/24 between The Work Number (TWN) and RI Bridges. Contract and budget actions for TWN services were not completed until fall 2024. The system requirements that Equifax initially communicated to the State and our Integrated Eligibility System implementation partner were incomplete and the original integration configured in fall 2024 did not successfully pass testing. A system modification to correct the original specifications was originally scheduled for February 2025 but was delayed due to the 12/13/24 RI Bridges cyber event. Target date for TWN implementation is July 2025. The Death Match process resumed in Spring 2025. Long-term modifications are scheduled for December 2025. These modifications include connecting RI Bridges to the SSA Death Master File (DMF) and utilizing the data from DMF as the primary source for monthly death verifications. During SFY 2024, several system fixes were deployed to address the findings noted in 2024-065. Specifically, in September 2024, a system fix was put in place to ensure children with verified SSNs were appropriately evaluated for Medicaid/CHIP coverage and excluded from Cover All Kids. The system automatically identifies individuals aging out of Medicaid Expansion prior to their 65th birth month and redetermines eligibility. EOHHS will improve controls of this process and ensure that if the system is unable to accurately remove the member from the Medicaid expansion category, a manual workaround will be implemented. Anticipated Completion Date: January 1, 2026 Contact Person: Anthony Salvo, Implementation Director of Policy and Programs, Executive Office of Health and Human Services anthony.salvo@ohhs.ri.gov 2024-065b: EOHHS will proactively work with the system vendor and other State agencies to implement controls over eligibility system and process deficiencies. Corrective actions will include, but are not limited to, manual processes, code fixes, and new system enhancements. Anticipated Completion Date: Ongoing Contact Person: Anthony Salvo, Implementation Director of Policy and Programs, Executive Office of Health and Human Services anthony.salvo@ohhs.ri.gov 2024-065c: EOHHS will identify and return any potential ineligible costs by end of the current Federal Fiscal Year (FFY). Anticipated Completion Date: September 30, 2025 Contact Person: Allison Shartrand, Assistant Director, Financial & Contract Management, Executive Office of Health and Human Services allison.shartrand@ohhs.ri.gov

The findings can be grouped into several areas as shown below. The responses are included below each grouping. Each response is included in each category. 1. Licensing a. “Licensing for providers of behavioral healthcare services and home and community-based services to members with developmental disabilities are, by statute, the responsibility of the Department of Behavioral Healthcare, Developmental Disabilities, and Hospitals (BHDDH). BHDDH, in conjunction with evaluations of provider health and safety standards, relicenses providers biennially. Inconsistent with most Medicaid providers, EOHHS, as the Medicaid agency, does not receive annual licensing data from BHDDH resulting in a weakness in control for this segment of providers.” b. “Licensing for providers of residential services (inclusive of psychiatric services) to children in the State’s custody is, by statute, the responsibility of the Department of Children, Youth, and Families (DCYF). DCYF, in conjunction with evaluations of provider health and safety standards, relicenses providers annually. Inconsistent with most Medicaid providers, EOHHS, as the Medicaid agency, does not receive annual licensing data from DCYF resulting in a weakness in control for this segment of providers. c. 4 out of 60 providers sampled noted instances where providers remained active during fiscal 2024 after provider licenses had expired, evidencing a deficiency in internal control relating to timely provider deactivation if provider licensure is not evidenced. No claims were paid to these providers thus noncompliance was not noted.” EOHHS’ Division of Medicaid Compliance is actively working with BHDDH, DCYF, and RIDOH to address the licensing concerns by strengthening the communication of end dates between each agency’s licensing division and Medicaid’s Division of Medicaid Compliance. Anticipated Completion Date: Ongoing. Anticipated June 2025. Contact Persons: Emily Tumber, Implementation Director of Policy and Programs, Executive Office of Health and Human Services emily.tumber@ohhs.ri.gov Nicholas James, Implementation Director of Policy and Programs, Executive Office of Health and Human Services nicholas.james@ohhs.ri.gov 2. Systems a. “Encounter data submitted by managed care organizations is not currently validated for provider enrollment upon acceptance. This deficiency in internal controls over provider eligibility prevents the detection of claiming submitted by unenrolled providers. Our testing noted 4 managed care providers that were not enrolled in the Medicaid Program as required by federal regulations resulting in noncompliance with provider eligibility requirements (questioned costs - $3,371). All 4 providers were out-of-state providers required to be enrolled under federal regulations based on the volume of services billed to RI Medicaid. Implementing this additional edit when processing encounter data would improve controls over compliance. b. For claims representing care furnished to a beneficiary by an out-of-state furnishing provider, the SMA may pay a claim, in limited circumstances, to a furnishing provider that is not enrolled in the reimbursing state’s Medicaid plan. In these circumstances, the State is required to meet several requirements including verification that the provider is enrolled in good standing in Medicare or another state’s Medicaid program. The State is not currently performing such validation for out-of-state providers with limited claiming. c. The State did not have documentation supporting review of the SSA Death Master file for 19 out of the 60 providers we tested. a. EOHHS conducted research on these cases and completed a system upgrade to remedy the issue on 5/1/2024. b. EOHHS conducted research on these cases and completed a system upgrade to remedy the issue on 5/1/2024. c. EOHHS implemented new Provider Screening Tool in February 2025 which will provide dated documentation following the automated search for various screening requirements, including Death Master File. This documentation will be uploaded to the provider file. This will eliminate the manual process of searching for providers individually through the Death Master File and relying on an individual recording the date. Anticipated Completion Date: Ongoing Contact Person: Kimberly Tebow, Senior Medical Care Specialist, Executive Office of Health and Human Services kimberly.tebow@ohhs.ri.gov 3. Provider Surveys a. Federal regulations require the Medicaid agency to execute provider agreements with nursing facility providers and intermediate care facilities for individuals with intellectual disabilities (ICF/IID) upon receiving notification from the State survey and certification unit that the provider has been certified in substantial compliance with federal health and safety regulations. The State Medicaid agency lacked documentation of a finalized provider agreements and approval letters to providers in 6 out of 18 providers reviewed. In respect to the State’s only ICF/IID facility, the State Medicaid agency was not monitoring the RI Department of Health’s (RIDOH) certification process and had no documentation from RIDOH regarding the facility’s health and safety certification. All providers were recertified by RIDOH and compliant with program health and safety requirements. EOHHS/Medicaid implemented tracking protocol for all surveys received by the RIDOH to ensure completeness and timely response. Revisions to the internal standard operating procedure for the review and approval of these surveys are under review. This was completed on February 1, 2024. Regarding the monitoring of RIDOH’s certification process, EOHHS will collaboratively work with RIDOH to implement a monitoring program. Anticipated Completion Date: June 2026 for the monitoring program. Contact Person: Patricia Arruda, Chief of Strategic Planning, Monitoring & Evaluation, Executive Office of Health and Human Services patricia.arruda@ohhs.ri.gov

EOHHS: The EOHHS Finance team created a Medicaid Administrative Claiming Reporting training presentation and trained all sister agencies with expectations for administrative claiming. The training included the following topics: administrative claiming background; completing required CMS-64 quarterly reporting for EOHHS which include timelines and supporting documentation; and frequently asked questions. The team also created a draft manual and shared this manual with the Medicaid admin claiming agencies. Additionally, EOHHS hired an additional FTE in the Medicaid Finance team during Autumn 2024 to support Medicaid Administrative Claiming of all agencies; however, this FTE was unable to commence work due to being placed in a three-day rule as acting Medicaid CFO. The FTE will resume full-time work in the new position in mid-May 2025. The goal of this position will be to work with the EOHHS Medicaid and Central Management teams to develop processes to address the audit findings. The Medicaid Finance team also has worked closely with the Medicaid program’s Division of Executive Administrative and Support Services to develop cross-training and draft SOPs related to the CMS-64. BHDDH: BHDDH concurs with this finding. Since the finding, BHDDH has refined their internal processes related to administrative claiming adding an additional staff member to doublecheck the Medicaid administrative claiming reporting to reduce the likelihood of future errors. The team members also conduct a reconciliation after the Medicaid cost allocation plan is processed. As of SFY 25 Q2 all time tracking is done internally for increased accuracy and more timely journal entries. Anticipated Completion Date: Ongoing Contact Persons: Dezeree Hodish, Associate Director (Financial Management), Executive Office of Health and Human Services dezeree.hodish@ohhs.ri.gov Deborah Mazzone, Deputy Finance Director, Department of Behavioral Healthcare, Developmental Disabilities and Hospitals deborah.l.mazzone@bhddh.ri.gov

2024-056a: During SFY 2024, several system fixes were deployed to address the findings noted in 2024-056. Specifically, in September 2024, a system fix was put in place to ensure children with verified SSNs were appropriately evaluated for Medicaid/CHIP coverage and excluded from Cover All Kids. RI Bridges appropriately determines eligibility for CHIP when TPL data is not present. Once TPL information is known to the system, existing eligibility rules will only evaluate for Medicaid, not CHIP. The TPL exceptions noted by the OAG show a discrepancy between TPL data in the MMIS and the information sent to RI Bridges via the TPL loopback file. EOHHS will work with their vendor to determine the root cause of the discrepancy and establish a corrective action plan if appropriate. Rhode Island did not participate in the February 2024 PARIS interstate match due to a file issue that has since been addressed in April 2024. The May and August 2024 PARIS matches were suspended at the Federal level for all States due to an outstanding computer matching agreement between the DoD and HHS/ACF. Enhancements to existing PARIS Interstate match logic are scheduled to run as planned for fall/winter 2025. Income/Wage Validation: EOHHS completed implementation of an interface on 3/5/24 between The Work Number (TWN) and RI Bridges. Contract and budget actions for TWN services were not completed until fall 2024. The system requirements that Equifax initially communicated to the State and our Integrated Eligibility System implementation partner were incomplete and the original integration configured in fall 2024 did not successfully pass testing. A system modification to correct the original specifications was originally scheduled for February 2025 but was delayed due to the 12/13/24 RI Bridges cyber event. Target date for TWN implementation is July 2025. Anticipated Completion Date: July 1, 2025 for income/wage validation. Contact Person: Anthony Salvo, Implementation Director of Policy and Programs, Executive Office of Health and Human Services anthony.salvo@ohhs.ri.gov 2024-056b: The Center for Staff Development and Learning (CSDL) the lead for training at the Rhode Island Department of Human Services (RIDHS) will work towards correction by using a blended approach to learning using formal (classroom or virtual learning sessions) and on the job learning activities. will conduct the following: a. The CSDL Team will continue to include in its Ex Parte Learning Series review of where the system performs an Ex Parte review to determine Medicaid eligibility for age outs ages 19, 26, and 65. In addition, included in the Medicaid Refresher, currently in development, a review will be done of updating income and verification procedures that includes end date and employment segments when household members lost employment. b. The Operations staff supervisors will schedule processing labs that will require the participants to process live cases with guidance from a supervisor. Anticipated Completion Date: The trainings and refresher learnings are ongoing. Processing labs are scheduled as need for this specific topic, we anticipate that processing labs will be scheduled and completed between July – September of 2025. The Medicaid Refresher Learning Series will be released in July. This training will also be ongoing. Contact Person: Zulma Valenzuela, Assistant Director of Administrative Services, Center for Staff Development and Learning, Department of Human Services zulma.valenzuela@dhs.ri.gov 2024-056c: As noted in prior year responses, CMS will not pursue recoveries associated with questioned costs given that recoveries based on eligibility errors can only be pursued when identified by programs operating under CMS’ Payment Error Rate Measurement program per section 1903(u) of the Social Security Act and regulations at 42 CFR Part 431, Subpart Q. This limits CMS’s ability to recover on most of the SSA eligibility findings. While CMS will pursue the internal control deficiencies noted by the SSA, CMS will not pursue recoveries associated with the questioned costs. Anticipated Completion Date: Not Applicable Contact Person: Anthony Salvo, Implementation Director of Policy and Programs, Executive Office of Health and Human Services anthony.salvo@ohhs.ri.gov

Management agrees with the finding regarding inaccurate calculations. Management disagrees with the finding regarding information about DCYF children in the system. The Office of Child Care (OCC) is continually reviewing available training materials related to CCAP eligibility and case processing and has identified certain gaps where additional training/clarification, and more frequent communication to processing staff is needed – specifically in income calculation/input of paystubs, confirming asset declarations, and confirming need hours. OCC is working with the DHS training department to create a CCAP-specific training to provide in-depth coverage of program requirements. OCC continues to present at quarterly meetings to highlight error findings and the critical importance of accurate documentation. In addition, the CCAP administrator works continuously with field staff and Deloitte through weekly theme meetings to identify areas where system changes can improve accuracy of eligibility determinations. OCC is currently reviewing the grace period/short-term approval policy, how it is applied to specific cases, and how it is implemented in RIBridges. The finding has been escalated from the CCAP administrator to the assistant director of the Office of Child Care to ensure continued collaboration from all facets of the eligibility work to continue to improve errors in determination. Anticipated Completion Date: Ongoing – will continue to see a decline in errors in eligibility approval. Contact Person: Nicole Chiello, Assistant Director, Office of Child Care, Department of Human Services nicole.chiello@dhs.ri.gov

DHS has a policy for subrecipient monitoring, which includes documentation required to be submitted by a subrecipient. The documentation is based on assessing the risk of each subrecipient. There is no requirement in the Uniform Grant Guidance in regard to supporting documentation requirements. The invoice needs to be certified by an authorized agent and the expense needs to have been reasonably incurred. DHS ensures compliance in numerous ways, including monthly programmatic meetings, site visits, review of single audits and past performance. Additionally, DHS contracts include a budget narrative and allows for DHS to require additional documentation for audit purposes. If requested, DHS would have been able to produce more documentation to satisfy the allowability of costs. Anticipated Completion Date: Not Applicable Contact Person: Ben Quattrucci, Associate Director Financial Contract Management, Department of Human Services benjamin.a.quattrucci@dhs.ri.gov

System changes to modify the time schedule that RIBridges interfaces with SWICA for processing tasks has already been submitted (RIB-141767). Currently, the interface occurs twice yearly. This will increase the frequency to quarterly. Anticipated Completion Date: October 31, 2025 Contact Person: Donna Rook, Administrator, Family and Adult Services, Department of Human Services donna.m.rook@dhs.ri.gov

DHS continues its prior actions of training addressing eligibility, standing agenda on meetings, and quarterly meetings. At this time, DHS has completed the solicitation to hire a contractor to identify problematic processes, through the Business Processing Excellence Reengineering project. (BPER). The scope of work includes evaluating the eligibility to determine the deficiencies and to propose solutions. Anticipated Completion Date: Ongoing Contact Person: Donna Rook, Administrator, Family and Adult Services, Department of Human Servicesdonna.m.rook@dhs.ri.gov

RIDOH agrees with the finding and recommendation. Corrective action plan: • In gathering time sheets for the requested audit samples, RIDOH found that some Master Time Sheet Coordinators (staff responsible for receiving signed time sheets, populating the Master Time Sheet spreadsheets sent weekly from/to HR/Payroll, and saving time sheets to the Time Sheet Repository in Teams) were saving documents locally instead of in the central Teams site. RIDOH is providing training and increased oversight of the non-compliant Time Sheet Coordinators and is conducting ongoing checks of the time sheets uploaded to Teams weekly to assure the time sheets are saved properly. • Instructions have been provided and will be reiterated Department-wide that all time sheets must be signed and dated by both the employee and supervisors, and signatures without dates are not acceptable. • RIDOH will adjust the questioned costs for ELC and DWSRF to appropriate non-federal funds. • RIDOH has been working to move staff that use the general category codes (i.e., EH Management & Leadership) to non-federal funding sources as much as possible and will begin requiring staff on federal funds to record their hours for each federal grant separately. This is a complicated process and will be fully implemented once Time and Effort reporting is transferred to Workday (the ERP). Anticipated Completion Date: The first three bullets above will be completed by June 30, 2025. Transition of Time and Effort reporting to Workday has been delayed, and the new target implementation date has not been announced. Contact Persons: Alisha Colella, Chief Financial Officer, Department of Health alisha.colella@health.ri.gov Carla Lundquist, Deputy CFO / Federal Grants Manager, Department of Health carla.lundquist@health.ri.gov

RIDOH agrees with the finding and recommendations and will develop and implement enhanced internal controls over Uniform Grant Spreadsheets (UGSs) to assure that all indirect cost billings and drawdowns of federal funds are appropriate and accurate. The UGS internal controls will include (but are not limited to): • Mandatory refresher training for all staff that complete and/or review UGSs, with focus on areas of potential errors and correct entry of UGS data in the Monthly Federal Grants Tracking spreadsheet used for drawdowns and indirect billing. • Providing a crosswalk of expenditure categories and natural accounts to grants management staff to assure appropriate and consistent assignment of transactions to categories subject to/not subject to indirect costs. • A rotating schedule of monthly in-depth reviews of UGSs to assure that data entry aligns with RIFANS transaction reports, transactions are recorded so natural accounts align with correct expenditure categories, the appropriate indirect cost rate is entered, and formulas for computation of indirect costs are not corrupted. Reviews will be conducted by supervisors of staff completing UGSs, and results will be reported to the Deputy CFO/Federal Grants Manager. • Review of the Monthly Federal Grants Tracking spreadsheets each month before indirect cost billing and federal drawdowns are completed, to assure that expenditures reported align with RIFANS reports and indirect billings and drawdown requests are appropriate. RIDOH credited the ELC Enhancing Detection federal award for the unallowable indirect costs on 3/14/2025 (J25075GMC530). The credit was calculated using RIFANS transaction data from 7/1/2020 through 3/13/2025, not from the UGSs. The UGSs for this award and others are being re-built from the start of the award using RIFANS data in new, less complicated templates to assure correct charging and reporting going forward. Anticipated Completion Date: July 31, 2025 Contact Persons: Alisha Colella, Chief Financial Officer, Department of Health alisha.colella@health.ri.gov Carla Lundquist, Deputy CFO / Federal Grants Manager, Department of Health carla.lundquist@health.ri.gov

2024-044a: Management agrees with this finding and will communicate the requirements for subrecipient monitoring and specifically the review of single audit reports to our agency partners for implementation. 2024-044b: Management agrees with this finding and will communicate the requirements for subrecipient monitoring and specifically the review of single audit reports to our agency partners for implementation. 2024-044c: Management agrees with this finding and will communicate the requirements for subrecipient monitoring; specifically, the documentation of expenses, and meeting notes. Anticipated Completion Date: Completed April 23, 2025 Contact Persons: Paul L. Dion, Director, Pandemic Recovery Office, Department of Administration paul.l.dion@doa.ri.gov Brianna Ruggiero, Chief of Staff, Pandemic Recovery Office, Department of Administration brianna.ruggiero@doa.ri.gov

UI Administrative staff meet with ETSS staff on a weekly basis to review and prioritize pending projects. The project related to the programming changes that are necessary to incorporate the 15% penalty, on fraud overpayments, is on the list, however, due to the complexity of the programming required as well as other competing obligations previously prioritized, this work has not yet started. Therefore, we anticipate this project will be implemented by next fall. Discussions regarding the non-relief of charges will begin when programming for the 15% project is complete. Anticipated Completion Date: September 30, 2026 Contact Person: Philip D’Ambra, Director of Income Support, Department of Labor and Training philip.l.dambra@dlt.ri.gov

Finding: 1 of 60 individuals had a return-to-work date submitted by the employer, however, the claimant received three payments after that date. DLT did not investigate any potential overpayment. (Questioned costs - $2,139) We do not concur with this finding. Per ETA guidance, specifically UIPL 01-16, because this claim was in payment status, we have to continue to make timely weekly payments (after proper certification), and an overpayment cannot be deemed recoverable until an official ineligibility determination is rendered. Unemployment Insurance Program Letter 01-16 states “in order to be eligible to receive administrative grants, a state must do the following in context of identifying and establishing improper payments…continue to make timely UC payments (if due) and wait to commence recovery of overpayments until an official determination of ineligibility is made…” In addition to the above requirement, data that State Workforce Agencies gather from crossmatch sources such as IB4, wage record /benefit, SDNH and NDNH wage/benefit have to be verified prior to initiating a decision disqualifying benefits. The actual cross match itself simply produces possible cases to investigate. The investigation is then initiated when the department sends out a request for wages form (720). When the form is returned by the employer the department can then use the verified information to render a disqualifying decision. A crossmatch itself is not enough to render a working and collecting determination based on wage record data as the claimant may have had actual earning within the quarter. The date identified on a NDNH crossmatch also is not enough to render a disqualification. This information needs to be verified. From: Unemployment Insurance 401 Handbook ETA 227 – OVERPAYMENT DETECTION AND RECOVERY ACTIVITIES E. Definitions 4. Cases Investigated. The number of cases emanating from a state-initiated overpayment detection process for which an investigation regarding a potential overpayment has been concluded. Example: during a wage/benefit crossmatch process, a state agency produces a printout identifying all benefit payments matched against wages in the same quarter. After the printout is screened, requests are sent to employers to identify which weeks in the quarter were worked. When an employer reply indicates overlap with weeks for which benefits were paid, claims are investigated to determine if they were overpaid. This was a continued claim that was effective 8/13/23 and the claimant certified weekly through 2/17/24. The RTW date listen on the ledger was autogenerated on 2/27/24. At this time the claimant had exhausted their balance of credits, all benefits had been paid. The date listed as the return-to-work date from the NDNH crossmatch stated 1/30/24. Since this date had the potential to affect benefits the department initiated it’s investigation and did send a 720 form to the employer to obtain the proper wage information. Since the requested information was not returned by the employer, the department lacked the proper information necessary to render a disqualification based on ETA guidelines. Finding: 1 of 60 was not registered within EmployRI and staff were unable to locate any records of the claimant. (Questioned costs - $10,829) The agency concurs with the above finding that includes state UC questioned costs of $10,829. This exception was caused by a programming (IT system) error. A nightly job is run that is sent to Workforce Development (Geosol) which then registers claimant’s with EmployRI. An issue was discovered on claims where the effective date of the claim was 56 days prior to the first payment being issued. These claimants were not populated on the nightly transfer to Workforce. ETSS has confirmed that this programming error has been fixed. We acknowledge the Auditor’s recommendations and offer the following response. We feel the findings, while relevant, are de minimis in scope, when compared to the workload volumes processed. Our current unemployment systems (Tax and Benefits) are aged and distressed. Due to their age and technology constraints, any changes or modifications needed, cannot be easily or quickly implemented. As such a larger burden is placed on staff to handle manually. DLT ‘s limited technology resources combined with having limited staffing resources also hinder our efficiency. We have limited staff resources to manually address our workload volumes, as well as the sheer number of forms involved in making proper determinations. In addition to this, the law requires benefit payments to be made timely based on available information until verifiable evidence is found that justifies a disqualification. Therefore, until we can implement a more modernized tax and benefits system, we acknowledge that similar findings such as these may persist. We will continue to utilize the resources we currently have and strive to be more efficient. We hope that by providing additional staff training and by strengthening our relationship with Workforce Development, this improved efficiency will be realized. We are in the process of evaluating whether or not an amendment to our work search requirement, is needed. In doing so, we will evaluate whether any changes are necessary to either; our internal policy, the guidance provided on the claimant’s benefit rights, the guidance displayed on DLT’s website and to regulation 1.18 Filing of Claims for Unemployment Insurance Benefits. Any necessary modifications will be made. Anticipated Completion Date: December 31, 2025 Contact Person: Philip D’Ambra, Director of Income Support, Department of Labor and Training philip.l.dambra@dlt.ri.gov

Pursuant to federal SNAP regulations at 7 CFR 272.4(g) and corresponding state regulations, the Department is required to establish and operate a fraud detection unit, which is responsible for the detection and investigation of SNAP fraud. The Office of Internal Audit (OIA) at the Department of Administration, Office of Management and Budget, through a Memorandum of Understanding (MOU), provides DHS with fraud detection, investigation and prevention services across DHS’s public assistance programs, including SNAP. DHS staff refer to OIA SNAP cases in which staff suspect fraud. OIA, in turn, investigates the allegation. If OIA determines that the household has committed an intentional program violation of SNAP, they pursue disqualification of the individual(s) from the program, either through an administrative disqualification hearing (ADH), a waiver of ADH, or refer the case to the state police for criminal prosecution. If the individual is found to have committed the IPV, and received SNAP benefits they were not entitled to, DHS establishes an overpayment claim against the household’s liable individuals. The liable individuals are required to make payment agreements to return to DHS, the benefits they received, but were not entitled to. If the fraud is referred for criminal prosecution, the amount of overpaid benefits is determined by the Court through an Order for Restitution. DHS followed the established and required protocols in the case cited in this finding. DHS referred a case to OIA in which identity fraud was suspected. OIA, with DHS assistance, and collaboration from the USDA Office of Inspector General (OIG), conducted the investigation, which revealed, not only fraudulent actions, but also criminal behavior and a significant estimate of overpaid SNAP benefits. The case was referred to the U.S. Attorney’s Office for prosecution. The criminal case is currently pending. Once a disposition is issued, DHS will take the appropriate sanction actions(s), including any disqualification from the SNAP, as well establishing an overpayment claim for any restitution ordered. Pursuant to federal regulations, any collection by DHS of any overpaid SNAP benefits will be returned to the Food and Nutrition Service (FNS), with DHS retaining 30% as provided for in the regulations. Should the liable individual not pay the ordered restitution in a timely manner and the claim becomes delinquent, DHS will pursue all other available collection actions to recoup the overpaid benefits. OIA and DHS also engage in fraud prevention activities, mainly by utilizing data analytics and identifying case issues that are indicative of fraudulent activities. Once an issue is identified, OIA, in conjunction with DHS, review the impacted case population and determine actions that should be taken to mitigate the issue as well as educate customers on actions they can take to safeguard their benefits, including changing EBT card PINs, freezing cards or limiting access to out-of-state or internet transactions. Other prevention actions that may be taken include changes to the card security through vendor options, as well as widespread communication to customers and the public on new fraud trends, etc. OIA and DHS also provide training to DHS staff to spot fraud in cases, including identifying fraudulent/altered documents, use of invalid identification cards, and identity fraud trends, etc. Approximately 60% of DHS staff have completed or are in the process of completing the fraud training. Anticipated Completion Date: The criminal case is ongoing. Contact Person: Iwona Ramian, Deputy Chief Legal Counsel, Department of Human Services iwona.ramian@dhs.ri.gov

Management will submit the cost allocation methodology for grants management services allocated to federal programs as part of the billed costs going forward. Anticipated Completion Date: Completed Contact Person: Kayla Marques, Supervisor Financial Management and Reporting, Department of Administration, Office of Accounts & Control kayla.marques@doa.ri.gov

Procedures are in process of being reviewed and will be completed prior to the issuance of this report. Underlying reports will be updated with the ERP implementation and corrected to capture all data for all programs in the TSA. Anticipated Completion Date: December 31, 2025 Contact Person: Xiomara Soto, Administrator Financial Management & Reporting, Department of Administration, Office of Accounts & Control xiomara.c.soto@doa.ri.gov

The District will ensure that Additional or Compensatory Special Education or Related Services (ACSERS) funds are not used to fund Substitute Services due to the teacher shortage.

This finding is related to activities on our VOCA grants. This exception was related to a process in place prior to May 2023 for allocating our outside contracted IT services Again, in May 2023 FRLS added an electronic transaction approval process via Teams, that documents approvals for all our AP, AR and other transactions initiated by our accounting staff. These are reviewed and approved by the CFO before being posted into the GL. FRLS failed to update its allocation for this prior allocation method for this legacy vendor. The CFO will undertake a review of this process to ensure that we are in compliance with allowable cost documentation requirements. We will also review and update our documentation of allocations and ensure that each month’s allocation is properly approved. This change will be made within the next 60 days.

This finding relates to activities on our Legal Services Field Grant. As part of FRLS’ post 2023 audit review, we implemented an update to our payroll accounting system that streamlined the process for uploading and properly coding employee time, salaries and benefits to the proper grant codes based upon a biweekly time reporting system. The exception created here came from a one-time payout for paid time off and as a result was not properly recorded to the correct grant codes. FRLS will be implementing within the next 60 days an update to its cost allocation policies to ensure any future “nonstandard” payroll payments are properly allocated.

Finding 2024-005: U.S. Department of Housing and Urban Development – CFDA #14.155 Mortgage Insurance for the Purchase or Refinance of Existing Multifamily Housing Projects Applicable Federal Award Number and Year – HUD loan under section 207/223(f), HUD Project No. 101-11316 Allowable Costs/ Allowable Activities Name of contact Person: Renee Gallegos, Finance Manager Anticipated completion date: Completed Planned Corrective Action: • Management has updated internal controls to include that all costs charged to the project are for allowable costs.

Contact Person – Krista Martin, Director of Finance and Administration, and Ryan Riesinger, Executive Director Corrective Action Plan – Review and update procedures over payment requests to ensure allowability accuracy. Completion Date –December 31, 2025

FINDING NUMBER: 2024-002 Condition: The CMHSP included all contract costs, including amounts over $25,000, in the modified total direct costs. Recommendation: We recommend that the CMHSP review/update policies and procedures to ensure that amounts used to calculate indirect costs charged to the grant properly exclude contract amounts over the allowed limit. Planned Corrective Action: Going forward the Authority will calculate the indirect costs based on up to $25,000 per contract employee. Contact Person: Anthony Shaver, Chief Financial Officer Anticipated Completion Date: 9/30/2025