Corrective Action Plans

Federal Eligibility Recommendation: We recommend that during the financial aid package review, additional procedures are put in place to ensure that student awards are appropriately calculated. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to the finding: The employee who committed the errors is no longer employed by Furman University. Based on federal regulations, citied in “Correcting Direct Subsidized Loan or Direct Unsubsidized Loan awarding errors” in Volume 8, Chapter 3 of the FSA Handbook: “If you discover that a student received Direct Subsidized Loan funds in excess of financial need after the student is no longer enrolled for the loan period, you are not required to take any action to eliminate the excess subsidized loan amount.” Furman University will continue to conduct regular training sessions for all financial aid counselors. These sessions focus on the latest federal and state regulations, including updates to Title IV guidelines, eligibility criteria, and documentation requirements. This ongoing training is crucial for maintaining our counselors' knowledge and effectiveness in managing financial aid processes. Furman University will perform an internal audit sample each month in conjunction with the completion of monthly reconciliations to ensure compliance with subsidized loans. Furthermore, all financial aid counselors are required to complete the “FSA Coach” training, an online resource provided by Federal Student Aid. This tool enhances their understanding of federal guidelines and best practices. To ensure future compliance, the Director of Financial Aid will conduct periodic internal audits. These audits will include a review of student files, application processes, and disbursement procedures to verify adherence to regulatory requirements. Additionally, the Director of Financial Aid will collaborate with a PowerFaids software consultant to explore the feasibility of generating specific reports that can monitor potential over awards of need-based aid. This proactive approach will help us identify and address any discrepancies promptly. Name(s) of the contact person(s) responsible for corrective action: Andrea Byrd Planned completion date for corrective action plan: 12/01/2024

Corrective Action Plan: 1. Enhanced Review Process o A biweekly reconciliation process is implemented where payroll charges are compared against the certified time and effort reports before submission for posting of grant funded payroll (updated Standard Operating Process on record). o The Grant Accountant will conduct a review to verify allocations align with the time and effort reports. o The Director of Grants Management will conduct a second review of the allocations to verify that allocations align with the time and effort reports before the report is sent to the Business Office for posting in the accounting system. 2. Monitoring and Compliance Checks o The Grants Management office will conduct quarterly internal audits of grant payroll allocations to verify compliance with grant requirements. By implementing these corrective actions, the College ensures that grant funded personnel profiles and associated expenses are accurately recorded to federal grant programs and prevent similar errors in the future. Timeline for Implementation of Corrective Action Plan: Implementation of the biweekly reconciliation process was completed in February 2025. Contact Person Agnes Simon, Senior Director of Grants Management

Corrective Action The Urban College of Boston (UCB) agrees with this finding, and upon its review of the affected student and the college’s policies and procedures, has determine the error was a result of an isolated event due to human error. This was an oversight on the part of the Director of Student Financial Services. When communicating with the Business Office on the amount of Pell funds to be returned for these students, the DSFS keyed in the wrong dollar amounts resulting in less funds being returned than should have been. Since this issue was discovered, our process has changed and to ensure the correct dollar amounts of returns are made, the DSFS receives an automated Refunds Due (ineligible disbursement) report each Monday morning and if students are listed based on R2T4 calculations, that report is then shared with our Business Office, so the exact dollars and funding sources are identified for returns. This prevents someone from needing to key in the amounts manually. The DSFS went back through all R2T4 packets to confirm that no other incorrect amounts were communicated so adjustments could be made if necessary. No other issues were found. Timeline for Implementation of Corrective Action Plan: Implementation of new processes effective April 1, 2024 Contact Person: Stacy Broadus, Director of Student Financial Services: Stacy.Broadus@urbancollege.edu

Corrective Action The Urban College of Boston (UCB) agrees with this finding and upon its review of the affected students and the college’s policies and procedures, has determined the errors are reflective of a lack of understanding of procedures involved in the return of uncashed checks. In April 2024 after the 2023 audit, we identified this as a missed practice in the Business Office procedures and because of the lack of understanding of the regulation, Business Office processes were created. Unfortunately, these 2023-2024 findings occurred prior to the implementation of this new process that was a result of the 2022-2023 audit. The Business Office leadership team reviews uncashed checks every 30 days as part of the ledger & billing reconciliation process to ensure these are addressed prior to the 240-day regulation. This process has been updated in the Business Office Cash Management operating procedure to ensure that UCB continues to meet the required timeline. Timeline for Implementation of Corrective Action Plan: Although categorized as a repeat finding, Urban College considers this year’s issue an extension of the original finding from the 2023 audit period. This is because the corrective action plan addressing the initial finding was not implemented until April 2024, after the conclusion of the 2023 audit. Furthermore, all the students involved in this year’s finding were enrolled before the corrective action plan was rolled out in April 2024. Contact Person: Stacy Broadus, Director of Student Financial Services: Stacy.Broadus@urbancollege.edu

Findings and Questioned Costs Relating to Federal Awards: Energy Incentive Program Disbursement to Ineligible Providers and Beneficiaries. Similar to prior year finding 2023-003, the program “Apoyo Energético”, funded by the American Rescue Plan Act (ARPA), that resulted in this finding concluded early 2023, which lack of a complete and robust operational guidance. The guidance used to manage the process were simple, not quite restrictive, and with little internal controls for both suppliers and beneficiaries. DDEC has adopted guidelines for both suppliers and beneficiaries that are more restrictive, and specific with internal regulations that ensure data retention and storage. A second initiative of this program, being “Apoyo Energético 2.0” commenced April 2024, which is funded by a CDBG-DR funds, for registration of potential suppliers and are following the guidelines issued. No findings were noted related to this program for which controls were enhanced, as a result corrective actions related to the 2023 finding.

Finding No. 2024-004 Failure to Properly Complete Required Verification Procedures ALNs: 84.007, 84.033, 84.063, 84.268 Program: Student Financial Assistance Cluster Corrective Action: Additional training will be provided to staff. Implementation Date: June 30, 2025 Contact Person: Amanda Fijal

Finding No. 2024-003 Failure to Determine Eligibility in Accordance with SFA Regulations ALNs: 84.007, 84.033, 84.063, 84.268 Program: Student Financial Assistance Cluster Corrective Action: Additional training will be provided to staff. Implementation Date: June 30, 2025 Contact Person: Amanda Fijal

2024-003 Federal Supplemental Educational Opportunity Grants; Federal Pell Grant Program; Federal Direct Student Loans; Teacher Education Assistance for College and Higher Education Grants- Assistance Listing Nos: 84.007, 84.063, 84.268, 84.379 Recommendation: We recommend the College review the R2T4 requirements and implement procedures to ensure scheduled breaks are properly factored into the R2T4 calculations. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The Office of Financial Aid will work with the Registrar to ensure that we receive the academic calendar in a timely manner. Once received, breaks will be verified by the Assistant Director of Financial Aid and then confirmed by the Director of Financial Aid. Name(s) of the contact person(s) responsible for corrective action: Jossie Johnson, Director of Financial Aid Planned completion date for corrective action plan: June 30, 2025

2024-002 Allowable Costs Recommendation: We recommend the School ensure policies and procedures for payroll expenditures for grant programs be charged to the federal grant based on approved hours worked in the program. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: For federally funded employees, CFO will complete semiannual certifications to validate federal grant based payroll expenses. Time and Distribution logs will be used for any part time federally funded employees. Name(s) of the contact person(s) responsible for corrective action: Deborah S. Czmiel Planned completion date for corrective action plan: 05/31/2025

For the unallowable loans from the School Food Service (SFS) account, we will execute a repayment agreement with terms and interest per the original agreement and annually submit proof of repayment and an assurance statement to the State Agency. To prevent recurrence, we will adopt policies prohibiting loans from the SFS account and train staff on fund restrictions under Uniform Guidance. We will also enhance review processes to ensure timely recording of interest receivable and proper structuring of amortization schedules. Policies for periodic reconciliation and agreement validation will be implemented, supported by financial software and accounting expertise, to ensure compliance with GAAP.

Finding Reference 2024-06 Corrective Action Plan: The Authority will revise its procurement policies and procedures to ensure that all federally funded projects undergo the appropriate competitive procurement processes. This will include consistent and standard guidelines for project scope determination, bidding process, and documentation requirements. Responsible: Eng. Maria Ayala Rivera, Construction Office Director Planned Implementation Date: December 31, 2025

Finding Reference 2024-02 Corrective Action Plan: The Authority has performed an internal review of the toll credits usage in the Excel spreadsheet and reconciled all credits used by projects with a start date of FY 2023 and forward against the latest version of the Federal-Aid Project Agreement approved by the Federal Highway Administration (FHWA). In addition, credits are sent to the Executive Staff for the approval process on a quarterly basis. For fiscal year 2024, the manual process of reconciling toll credits for new projects with a start date of January 2024 or forward was changed to an automated process using the PMIS Program, as agreed with Section II of the Memorandum of Understanding (MOU) signed in February 2016 between FHWA and the Authority. Also, current toll credits tracking, reconciliation, and approval processes are reviewed by the FHWA. For projects with a start date before January 2024, the Authority will perform an internal review of the tolls credit usage against the later version of the Federal-Aid Project Agreement approved by FHWA. Additionally, the Authority is developing a Standard Operating Procedure (SOP) with FHWA for the use of Toll Credits in PMIS along with a new version of the Excel spreadsheet. Responsible: Mr. Enrique J. Rosa Torres, Executive Director of Administration and Finance Planned Implementation Date: In process. Expected to be completed on or before December 31, 2025.

Audit Finding Reference: 2024-003 Improve Controls and Documentation over Payroll Process Planned Corrective Action: Halfway through FY24, the District implemented a new payroll system, ADP. Since onboarding, it has become apparent that the "crosswalk" between ADP account codes and Munis codes is not adequate for the complexity in reporting for many of the District's federal and state awards. As ADP is a highly customizable platform, the Payroll and Finance team are in the process of designing a structure for seamless integration between running payroll and posting payroll to Munis, and ultimately charging those costs to grant awards. While this is occurring, the accounting team will review and reconcile payroll as possible in alignment with budgeted grant expenses. Name of Contact Person: Lesa Beck, Senior Payroll Manager Heather Peters, Accounting Manager Anticipated Completion Date: 6/30/2025

Current Findings on the Schedule of Findings, Questioned Costs, and Recommendations Finding 2024-001: An unauthorized withdrawal of $2,000 was transferred from the reserve for replacement to the operating cash account on November 25, 2024. Comments on the Finding and Each Recommendation The funds were withdrawn from the account due to the delay in the project receiving the HAP payment. The amount was deposited back into the reserve for replacement account on December 2, 2024. All other withdrawals from the reserve for replacement during the year were properly approved. The project had a rent increase effective September 1, 2024 of which they are still waiting to receive rents owed from HUD. Management has received email approval for borrowing money from the reserve in 2025. Actions Taken on the Finding Management will transfer from the reserve for replacement account into operating cash account only when they receive proper approval from HUD. CAP prepared by: Trisha Jester Director of Multifamily Housing Arbors Management, Inc. 724-733-5733 Anticipated completion date: March 31, 2025

Management has historically maintained robust timekeeping procedures to ensure time is allocated as accurately as possible based on projected activities. However, we recognize the need for a more timely process for making adjustments from estimated to actual time worked. To address this, the new program director scheduled quarerly meetings with our external accountant, beginning in April 2025, to review and update time allocations based on actual activity> We have also requested that fringe benefits be allocated in a manner consistent with how salalries are charged to the federal grant and will review to verify. These steps will ensure that both time and fringe benefit allocations more closely reflect actual effort and remain in alignment with federal grant requirements.

FINDING 2024-002 Subject: Title I Grants to Local Educational Agencies - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Number or Year (or Other Identifying Number): S010A210014 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Condition and Context Direct charges to a federal award are to be for allowable activities and allowable costs made in conformance with the applicable cost principles. The School Corporation did not have a process or internal controls in place to ensure expenditures for the 2021 Title I grant award were for allowable activities and costs and in conformance with the cost principles. The School Corporation was unable to provide supporting documentation for $43,141 worth of expenditures transferred out of the 2021 grant award fund 4121 from July 1, 2022 to December 1, 2022. These expenditures were originally expended from the Title I 2021 grant award fund 4121, requested for reimbursement and then the expenditures were moved to other funds. Because these expenditures were reappropriated, they were not an allowable activity or cost of the 2021 Title I grant award. In addition, the School Corporation was unable to provide supporting documentation for $6,646 worth of certified salary expenditures requested for reimbursement for the same grant award from February 17, 2022 to June 30, 2022. It was determined that this amount was double requested for reimbursement and was not an actual expenditure. The total amount of $49,787 was considered questioned costs. Subsequent to the 2021 Title I grant award, the School Corporation established and implemented a process and internal controls to ensure expenditures for the 2022 and 2023 awards from July 1, 2022 through December 31, 2023, were for allowable activities and costs and in conformance with the cost principles. The vendor expenditures are initiated by the Title I Director and the Title I Administrative Assistant. Payroll is reviewed each pay period by the Title I Administrative Assistant. The Business Manager/Treasurer prepares the reimbursement request using a detailed expenditure report from their accounting system. The Title I Administrative Assistant verifies the information entered into the reimbursement request by also comparing it to the detailed expenditure reports. The Title I Administrative Assistant also reconciles the Title I award to the expenditures. INDIANA STATE BOARD OF ACCOUNTS 18 METROPOLITAN SCHOOL DISTRICT OF STEUBEN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) If the Title I Administrative Assistant identifies that a correction of errors needs to be made to a Title I fund, they fill out a Corrections Form. The Title I Director then reviews and signs the form and provides it to the Business Manager/Treasurer to make the correction in the accounting system prior to completing a request for reimbursement. After the corrections have been made, the Title I Administrative Assistant verifies the changes were correctly made. After all corrections are made, the reimbursement request is approved by the Title I Director and then submitted by the Business Manager/Treasurer. We tested 25 other non-journal entry expenditures from all three Title I grant awards during the audit period and did not identify any additional noncompliance with these expenditures. The lack of internal controls and supporting documentation was isolated to the 2021 Title I grant award number S010A21001 from February 17, 2022 to December 31, 2022. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.302(b) states in part: "The recipient's and subrecipient's financial management system must provide for the following: . . . (7) Written procedures for determining the allowability of costs in accordance with subpart E of this part and the terms and conditions of the Federal award." INDIANA STATE BOARD OF ACCOUNTS 19 METROPOLITAN SCHOOL DISTRICT OF STEUBEN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for the Federal awards that are renewed quarterly or annual, from the date of submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation. The School Corporation segregated duties of knowledgeable staff that were involved in the process of purchasing, entering claim information, processing claim and payroll information, and using reliable financial data from the accounting system. However, it had not established a process or internal controls for the 2021 Title I award number S010A21001 to ensure that all accounting corrections were made prior to processing a request for reimbursement. Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation could not ensure that only expenditures for allowable activities and costs were made and requested for reimbursement. Any program funds the School Corporation reallocated to other funds or double requested for reimbursement would be unallowable, and the awarding agency could potentially recover them. Questioned Costs Questioned costs in the amount of $49,787 were identified as noted in the Condition and Context. Recommendation We recommended that Management of the School Corporation establish a proper system of internal controls and develop written policies and procedures to ensure that expenditures for all Title I grant awards are for allowable activities and costs in conformance with the cost principles and that support for all expenditures and journal entries is maintained for the date ranges of costs documented on the requests for reimbursement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

Finding 2024-003 – U.S. Department of Education (USDE), Title IV Student Financial Aid Programs (Significant Deficiencies): We observed the following conditions in connection with our testing of the various U.S. Department of Education, Title IV, Student Financial Assistance Programs. 1) The College did not reconcile the following programs between the Office of Financial Aid and the Business Office. Per 34 CFR 685.300(b)(5). a. Federal Pell Grant Program b. Federal Direct Student Loans c. Federal SEOG d. Federal Work-Study (FWS) Program 2) The Office of Financial Aid submitted unreconciled expenditures within the Fiscal Operations Report and Application to Participate (FISAP) for the programs below: a. Federal Pell Grant Program b. Federal Work-Study (FWS) Program c. Federal SEOG 3) Thirty-two out of 60 students had a credit balance on their account created by Title IV program funds longer than 14 days. 34 CFR 668.164(h)(1). Auditor's Recommendation – The University should implement corrective actions to ensure that the above findings are resolved and will not recur in future periods. Corrective Action – Refunds – The refund non-compliance is contributed to the institution’s ERP (Jenzabar) not being operational for about 7 months. This hindered the staff’s ability to properly review and process student refunds timely. The institution has a process in place to ensure compliance of distribution and is also enhancing the student refund module to improve timeliness of refund distribution. Federal Reconciliations and FISAP – The non-compliance is contributed to the institution’s ERP (Jenzabar) not being operational for about 7 months. This hindered the staff’s ability to properly reconcile federal funds timely and assurance in accuracy in completing the FISAP. In addition, the software enhancements for the Accounting modules, the institution has purchased a system enhancement for Financial Aid to be able to centralize FA processing and generate Federal Reconciliations and FISAP report. The Jenzabar Financial Aid software will assist the institution with maintaining compliance with all external federal reporting.

Finding 2024-004 - U.S. Department of Education (USDE) - Higher Education Institutional Aid (Title III Programs) (Material weaknesses and Significant deficiencies): A. We observed the following questioned cost of $505,004 during our testing of Title III and Future Grant drawdowns (material weaknesses): a) Adequate supporting source documents and general ledger data was not readily on file to support three (3) of eleven drawdowns tested. The University subsequently supplied adjusting journal entries to reclass expenditures previously recorded elsewhere in the general ledger. However, the total amount of the questioned cost noted above was not substantiated, resulting in excess federal cash on hand. b) We noted two (2) drawdowns for payroll were drawn 20 days and nine (9) days before the actual payroll dates. B. Our testing of Title III cash disbursements revealed questioned cost of $55,525 as stated below (significant deficiency): a) Adequate supporting source documents, such as invoices, check request, and evidence of approval were not on file or provided for one (1) of eight (8) disbursements tested. b) One (1) check contained only one signature. C. We noted the following during our review of budget versus actual reporting. a) The University did not properly and accurately maintain budget vs actual schedules to adequately validate carryover and remaining balances. The budgets for Title Ill, Future grants appear to have been overspent; however, the reasonableness of under or over prior year remaining balances could not accurately be determined. D. We noted the following during our testing of time and effort reporting (significant deficiencies): a) The University subsequently provided corrected Time and Effort Reports for nine (9) out of 12 tested which we noted were previously missing employee signatures, signatures of approval by supervisor or next level of authority, salary distribution percentages, and grant funding codes. b) Personnel Action Forms originally provided for three (3) of four (4) employees tested did not contain salary allocations as evidence that salaries were to be allocated to the program. The University subsequently corrected the forms. c) The University also provided adjusting entries to reclassify salaries that were incorrectly recorded in the general ledger; however, we were unable to trace the salary distribution to the general ledger for two (2) of 12 tested. Auditor's Recommendation – 1) We recommend all drawdowns are approved by management prior to the request being made and reviewed to assure that drawdowns and supporting expenditures are accurately and timely recorded. Federal regulations require that funds drawn down are limited to the minimum amounts needed to cover immediate project cost and not made to cover future or budgeted expenditures. 2) We recommend the University require prior approval for all disbursements, including credit card, check, wires, and electronic funds transfer, and maintain supporting source documents in a manner that’s easily accessible when needed. Proper supporting source documents include invoices, approved expense/check request, payment advice copy, etc. 3) We recommend the University implement procedures for budget versus actual reporting to include allowable carryover budgets to accurately reflect remaining balances and to assure that the University is operating within the constraints of the grant budgets. 4) We recommend that the University maintain adequate supporting source documentation as evidence that time and effort reporting is accurately completed, reviewed and approved prior to seeking reimbursement for payroll expenses from the grantor. Federal regulations require that grant recipients provide reasonable assurance that charges are accurate, allowable, and properly allocated and that salary and wages charged to federal awards are based on actual rather than budget estimates. Corrective Action – The Vice President for Fiscal Affairs has implemented standard operating procedures to ensure the following: drawdown review and approval, centralize location for all grant related documents, award letters, invoices, etc. with accessibility for both Business Office and Sponsored Programs, and grant reconciliation completion date. The SOP will be included in the update Business Office Procedure document that will completed this fiscal year. The items identified in the 23-24 audit for grant were also contributed to the down-time of the ERP as well as having a new team in Sponsored Programs and Business Office reviewing and restoring the accounting records while trying to ensure accuracy and integrity in the recording of transactions. The institution disagrees with in-adequate approval of documents. The ERP is designed to not process purchase orders without appropriate approvals. All requisitions are approved by the area Vice President with any transactions $10,000 and over requires the signature of the President.

Identifying Number: 2024-001 Audit Finding: Accounting for Pharmacy 340B Drug Pricing Program Transactions. While testing the 340B Program, revenue and accounts receivable, we identified the following errors: • The Organization overstated 340B Program accounts receivable and revenue by double-counting a 340B Program transaction in the amount of $213,887. • The Organization understated 340B Program accounts receivable and revenue by $45,038 by not properly recording a transaction with a pharmacy. • The Organization overstated 340B Program revenue and professional services expense by $1,111,252 by posting an incorrect adjustment to true-up revenue and expense for dispensing, processing and administrative fees associated with the 340B Program. Corrective Action Taken: The Controller will utilize program data reports to perform reconciliations periodically. The reconciliations will be reviewed by the VP of Finance and stored. Additionally, the Revenue Cycle Manager and the VP of Finance will assist and monitor TPA’s setup and conditions for proper program management. This will be implemented by June 30, 2025. Identifying Number: 2024-002 Audit Finding: Inadequate Internal Controls Over Payroll Transactions. In May 2024, the Organization failed to restrict the modification of payroll reports subsequent to approval. There was no final check performed to ensure that the final submitted payroll report agreed with the approved version. Corrective Action Taken: By June 2024, the Finance Director created additional checks and balances to ensure integrity of payroll. The Director will provide a trend analysis of payroll data for each payroll for the approval process. The analysis will show changes in employee pay and trends. We will also compare the final payroll totals with the website verification after submission to ensure the totals reviewed match what was submitted. Identifying Number: 2024-003 Audit Finding: While testing the procurement requirement for micro purchases, we noted there was one sample selection for which the Organization did not have documentation to support whether the procurement method used was appropriate. Corrective Action Taken: By June 30, 2025, the Operations team and the Accounts Payable Coordinator will maintain a centralized database of vendor contracts, bids, and other information regarding purchases. To ensure continuity through changes in personnel, Tapestry will store the data on the shared drives, allowing for a repository to persist over time. Purchases, contracts, and associated back up will be monitored by both Operations and Finance teams and will be assisted by Office Managers who may perform some ordering.

During September 2024, the $375 deposit was paid to the reserve for replacement account.

Period of Performance Recommendation: We recommend that the City of Portsmouth review its procedures to ensure that expenditures charged to the program are incurred within the grant’s period of performance. Explanation of disagreement with audit finding: NO Action taken in response to finding: Review grant related procedures to ensure all expenditures take place during the grant period. Name(s) of the contact person(s) responsible for corrective action: Jeffrey Crimer, Patrick Fletcher, & Kyera Pope. Planned completion date for corrective action plan: 6/30/25

Allowable Activities – Gift Card Recommendation: We recommend that the City develop and distribute clear guidelines on the documentation requirements for the assistance program and provide training for staff on the importance of obtaining and maintaining proper documentation and adhering to internal controls. Explanation of disagreement with audit finding: NO Action taken in response to finding: Review and evaluate the policies for safeguarding assets and maintaining better records and reconciliation procedures. Name(s) of the contact person(s) responsible for corrective action: Temeka Mayes, Trey Burke Planned completion date for corrective action plan: 6/30/25

The City will improve its internal controls by implementing a new policy and procedures that will require staff training and outline detailed procedures for complying with program income regulations. The policy will: (1) require staff to annually participate in HUD trainings related to program income, (2) require staff to immediately deposit and reconcile program income upon receipt, (3) require staff to prepare a monthly program income report and (4) require management to review the program income report to ensure program income is applied to eligible expenses prior to drawing down grant funds.

Stoneboro Development Corporation Stoneboro, Pennsylvania CORRECTIVE ACTION PLAN March 25, 2025 U.S. Department of Housing and Urban Development City Crescent Building 10 South Howard Street Baltimore, Maryland 21201-2505 Stoneboro Development Corporation respectfully submits the following Corrective Action Plan for the year ended June 30, 2024. Bernard Robinson & Company, L.L.P. 1501 Highwoods Blvd., Suite 300 Post Office Box 19608 Greensboro, North Carolina 27419-9608 The findings from the year ended June 30, 2024 Schedule of Findings and Questioned Costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. Finding 2024-001: U.S. Department of Housing and Urban Development, Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, Market Interest Rate, Assistance Listing #14.155 Recommendation: We recommend that management and the board of directors continue to work to improve occupancy and submit special claims requests to HUD for vacant units to improve cash flow to ensure timely payment of the mortgage payments and escrow deposits. Action Taken: We agree with Finding 2024-001 described in the accompanying schedule of findings and questioned costs. Effective June 1, 2023, the board of directors contracted with a new management company. The new management company is increasing advertising to fill vacancies and submitting special claims requests to improve the cash flow. Additionally, the new management company is working with the lender to make additional mortgage payments and escrow deposits as cash flow permits. If HUD has questions regarding this corrective action plan, please call (412) 246-9213. Sincerely yours, Trisha Jester Director of Multifamily Housing Arbors Management, Inc. Managing Agent

The District Administration will closely monitor procedures for the timely completion of personnel activity reports.