Corrective Action Plans

Finding 1161447 (2022-004)

Material Weakness 2022

Medstar, Inc.

MI

Questioned Costs Allowable Costs / Cost Principles Cash Management

Finding Number: 2022-004 Condition: The Organization was unable to provide supporting documentation to substantiate the allowability and accuracy of the expenses and lost revenue submitted in the portal. Planned Corrective Action: Company is an emergency services (ambulance, first responder, and was...

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

View Audit 371328 Questioned Costs: $1

Finding 1161261 (2022-047)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Subrecipient Monitoring Questioned Costs Reporting

Finding No.: 2022-047 AL Program: 97.039 - Hazard Mitigation Grant Program Area: Reporting Questioned Costs: $-0- Contact Person(s): Patrick Guerrero, Governor’s Authorized Rep., PAO Corrective Action Plan: Condition 1: HMGP agrees with this finding. HMGP acknowledges that this FFATA reporting condi...

Finding No.: 2022-047 AL Program: 97.039 - Hazard Mitigation Grant Program Area: Reporting Questioned Costs: $-0- Contact Person(s): Patrick Guerrero, Governor’s Authorized Rep., PAO Corrective Action Plan: Condition 1: HMGP agrees with this finding. HMGP acknowledges that this FFATA reporting condition was not addressed during the time period under review. However, HMGP became aware of the issue during a previous audit and have since been working to implement corrective measures. An action already taken for HMGP includes reaching out to the Public Assistance Office who had already begun the process of obtaining the necessary permissions on the FFATA Subaward Reporting System (FSRS) online submission portal to assign a designated administrator for our programs. The next action steps are: o To continue to work with the Governor’s office staff at to gain access through SAM.gov to ensure timely reporting of all subawards to FFATA/SAM.gov. o To establish adequate policies and procedures within HMGP’s standard operating procedures for the preparation and submission of FFATA reports to the FSRS. Once HMGP is provided with the necessary guidance and submission access on the FSRS, HMGP will promptly establish written internal controls to prevent any future non-compliance. HMGP understands that although the action steps taken to meet FFATA reporting compliance is actively underway, each subsequent Fiscal Year will unfortunately reflect a lack of FFATA submissions until the process is resolved and implemented. Proposed Completion Date: September 30, 2026

View Audit 371187

Finding 1161260 (2022-046)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Questioned Costs Cash Management Subrecipient Monitoring

Finding No.: 2022-046 AL Program: 97.039 - Hazard Mitigation Grant Program Area: Cash Management Questioned Costs: $2,687,277 Contact Person(s): Patrick Guerrero, Governor’s Authorized Rep., PAO Corrective Action Plan: Condition 1: HMGP respectfully disagrees with this finding. According to 31 CFR p...

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

View Audit 371187 Questioned Costs: $1

Finding 1161259 (2022-045)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Allowable Costs / Cost Principles Cash Management Questioned Costs § 200.1

Finding No.: 2022-045 AL Program: 97.039 - Hazard Mitigation Grant Program Area: Allowable Costs/Cost Principles Questioned Costs: $99,924 Contact Person(s): Patrick Guerrero, Governor’s Authorized Rep., PAO Corrective Action Plan: The Hazard Mitigation Grant Program (HMGP) agrees with this finding....

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

View Audit 371187 Questioned Costs: $1

Finding 1161258 (2022-044)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Questioned Costs Subrecipient Monitoring § 200.332 § 200.501

Finding No.: 2022-044 AL Program: 97.036 - Disaster Grants - Public Assistance (Presidentially Declared Disasters) Area: Subrecipient Monitoring Questioned Costs: $1,540,330 Contact Person(s): Patrick Guerrero, Governor’s Authorized Rep., PAO Corrective Action Plan: Condition 1: The Public Assistanc...

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

View Audit 371187 Questioned Costs: $1

Finding 1161257 (2022-043)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Subrecipient Monitoring Questioned Costs Reporting

Finding No.: 2022-043 AL Program: 97.036 - Disaster Grants - Public Assistance (Presidentially Declared Disasters) Area: Reporting Questioned Costs: $-0- Contact Person(s): Patrick Guerrero, Governor’s Authorized Rep., PAO Corrective Action Plan: Condition 1: The Public Assistance Office agrees with...

Finding No.: 2022-043 AL Program: 97.036 - Disaster Grants - Public Assistance (Presidentially Declared Disasters) Area: Reporting Questioned Costs: $-0- Contact Person(s): Patrick Guerrero, Governor’s Authorized Rep., PAO Corrective Action Plan: Condition 1: The Public Assistance Office agrees with this finding and is aware of the need to submit the Federal Funding Accountability and Transparency Act (“FFATA”) reports. The Public Assistance Office will continue to work on gaining access through SAM.gov to ensure timely reporting of all subawards to FFATA/SAM.gov. As of September 2025, the Public Assistance Office has continued to attempt to gain access to enter these reports. Should the Public Assistance Office be granted access and necessary permissions to FFATA/SAM.gov, the Compliance and Audit Manager will input all previously unreported FFATA subaward data. Proposed Completion Date: December 31, 2025

View Audit 371187

Finding 1161256 (2022-042)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Subrecipient Monitoring Questioned Costs Period of Performance § 200.344

Finding No.: 2022-042 AL Program: 97.036 - Disaster Grants - Public Assistance (Presidentially Declared Disasters) Area: Period of Performance Questioned Costs: $423,234 Contact Person(s): Patrick Guerrero, Governor’s Authorized Rep., PAO Corrective Action Plan: Condition 1: 1. Regarding the finding...

Finding No.: 2022-042 AL Program: 97.036 - Disaster Grants - Public Assistance (Presidentially Declared Disasters) Area: Period of Performance Questioned Costs: $423,234 Contact Person(s): Patrick Guerrero, Governor’s Authorized Rep., PAO Corrective Action Plan: Condition 1: 1. Regarding the finding related to DR4235MP, PW 95, the Public Assistance Office agrees that the liquidation was processed after the liquidation deadline. 2. Regarding the finding related to DR4396MP, PW 4, the Public Assistance Office disagrees with this finding. Liquidation was done prior to the closeout deadline of December 31, 2022. 3. Regarding the finding related to DR4511MP, PW 27, the Public Assistance Office disagrees with this finding. Liquidation was done prior to the closeout deadline of June 30, 2025. 4. Regarding the finding related to DR4511MP, PW 8, the Public Assistance Office disagrees with this finding. Liquidation was done prior to the closeout deadline of June 30, 2025. As of Fiscal Year 2024, the Public Assistance Office initiates drawdown requests, allowing for more timely processing. The office will implement better financial monitoring procedures to ensure obligations are liquidated within the required liquidation period. Staff will also be refreshed on liquidation requirements to ensure compliance. When delays are anticipated, the office will coordinate with subrecipients and promptly request necessary time extension approvals from Grantor to maintain compliance. Proposed Completion Date: Ongoing Condition 2: The Public Assistance Office respectfully disagrees with this finding. • Regarding the finding related to DR4235MP, PW 49, the Public Assistance Office disagrees with this finding. The invoice was dated and recorded after the period of performance (June 30, 2022), but date of actual work completed as shown on the Megger Test was May 20, 2022. The Public Assistance Office acknowledges that the record of the Megger Test had not been submitted to the auditors when submitting documentation. The Public Assistance Office will continue to exercise diligence in reviewing project documentation to ensure that all work is verified and completed prior to payment/reimbursement. The office will continue to monitor performance timelines to confirm that work is completed on or before the established period of performance deadlines. This process will include periodic internal reviews and coordination with subrecipients to ensure compliance. When delays are anticipated, the office will coordinate with subrecipients and promptly request necessary time extension approvals from Grantor to maintain compliance. Proposed Completion Date: Ongoing

View Audit 371187 Questioned Costs: $1

Finding 1161252 (2022-041)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Questioned Costs Special Tests & Provisions Subrecipient Monitoring

Finding No.: 2022-041 AL Program: 93.778 - Medical Assistance Program Area: Special Tests and Provisions - Provider Eligibility (Screening and Enrollment) Questioned Costs: $3,640,189 Contact Person(s): Geroge J. Cruz, Medicaid Director Corrective Action Plan: The CNMI Medicaid Office respectfully d...

Finding No.: 2022-041 AL Program: 93.778 - Medical Assistance Program Area: Special Tests and Provisions - Provider Eligibility (Screening and Enrollment) Questioned Costs: $3,640,189 Contact Person(s): Geroge J. Cruz, Medicaid Director Corrective Action Plan: The CNMI Medicaid Office respectfully disagrees with the finding. While the office did perform OIG exclusion list validation, screenshots were not captured for each individual check. It is important to note that the OIG Exclusion List portal’s search function is limited to on-screen viewing and does not provide a built-in option to print or export search results. Additionally, the CMS access process for exclusion checks involves a rigorous background clearance, and only one personnel of three total successfully gained access. The CNMI Medicaid Office acknowledges that historically, limited personnel capacity has hindered full compliance with this requirement. However, efforts are currently underway to streamline and strengthen the exclusion verification process. The office is actively developing a fully functional Program Integrity Division that will be responsible for conducting and documenting OIG exclusion checks in a consistent and compliant manner moving forward. Proposed Completion Date: January 1, 2027

View Audit 371187 Questioned Costs: $1

Finding 1161251 (2022-040)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Questioned Costs Special Tests & Provisions Subrecipient Monitoring

Finding No.: 2022-040 AL Program: 93.778 - Medical Assistance Program Area: Special Tests and Provisions - ADP Risk Analysis and System Security Review Questioned Costs: $-0- Contact Person(s): Geroge J. Cruz, Medicaid Director Corrective Action Plan: The CNMI Medicaid Office respectfully disagrees ...

Finding No.: 2022-040 AL Program: 93.778 - Medical Assistance Program Area: Special Tests and Provisions - ADP Risk Analysis and System Security Review Questioned Costs: $-0- Contact Person(s): Geroge J. Cruz, Medicaid Director Corrective Action Plan: The CNMI Medicaid Office respectfully disagrees with this finding. Due to internal scheduling constraints and the compressed timeline required to complete the FY22 audit, the requested documents were not submitted by the specified deadline, resulting in this finding. However, the office maintains all relevant supporting documentation and is prepared to provide it upon request from the Grantor. Proposed Completion Date: Ongoing

View Audit 371187

Finding 1161250 (2022-039)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Questioned Costs Reporting

Finding No.: 2022-039 AL Program: 93.778 - Medical Assistance Program Area: Reporting Questioned Costs: $-0- Contact Person(s): Geroge J. Cruz, Medicaid Director Corrective Action Plan: Condition 1: The CNMI Medicaid Office respectfully disagrees with this finding for several reasons, including but ...

Finding No.: 2022-039 AL Program: 93.778 - Medical Assistance Program Area: Reporting Questioned Costs: $-0- Contact Person(s): Geroge J. Cruz, Medicaid Director Corrective Action Plan: Condition 1: The CNMI Medicaid Office respectfully disagrees with this finding for several reasons, including but not limited to the fact that the auditor’s calculation includes a separate funding source that should not have been attributed to the actual total. Additionally, the stated variances were addressed through prior period adjustments, which are reflected in the succeeding quarter(s). However, the office maintains all relevant supporting documentation and is prepared to provide it upon request from the Grantor. Proposed Completion Date: Ongoing

View Audit 371187

Finding 1161249 (2022-038)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Allowable Costs / Cost Principles Eligibility Questioned Costs

Finding No.: 2022-038 AL Program: 93.778 - Medical Assistance Program Area: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Questioned Costs: $27,816,686 Contact Person(s): Geroge J. Cruz, Medicaid Director Corrective Action Plan: Condition 1: The CNMI Medicaid Office respectfull...

Finding No.: 2022-038 AL Program: 93.778 - Medical Assistance Program Area: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Questioned Costs: $27,816,686 Contact Person(s): Geroge J. Cruz, Medicaid Director Corrective Action Plan: Condition 1: The CNMI Medicaid Office respectfully disagrees with this finding. Due to internal scheduling constraints and the compressed timeline required to complete the FY22 audit, the requested documents were not submitted by the specified deadline, resulting in this finding. However, the office maintains all relevant supporting documentation and is prepared to provide it upon request from the Grantor. Proposed Completion Date: Ongoing Condition 2: The CNMI Medicaid Office respectfully disagrees with this finding. Due to internal scheduling constraints and the compressed timeline required to complete the FY22 audit, the requested documents were not submitted by the specified deadline, resulting in this finding. However, the office maintains all relevant supporting documentation and is prepared to provide it upon request from the Grantor. Proposed Completion Date: Ongoing Condition 3: CNMI Medicaid Office respectfully disagrees with this finding. The agency currently does not have a Medicaid Management Information System (MMIS) in place to collect and accurately report comprehensive Benefits Paid data. All data processing is done manually, and information is maintained using Excel spreadsheets, which limits the ability to generate complete and reliable reports. Additionally, the "Benefits Paid" data provided to the auditor does not include services covered under the Certified Public Expenditures (CPE) payments made to CHCC. Therefore, these records should not be used as the sole basis for evaluating program eligibility, total expenditures, or compliance with eligibility requirements. However, the CNMI Medicaid Office maintains all relevant supporting documentation and is prepared to provide it upon request from the Grantor. Proposed Completion Date: Ongoing

View Audit 371187 Questioned Costs: $1

Finding 1161244 (2022-037)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Questioned Costs Special Tests & Provisions Subrecipient Monitoring

Finding No.: 2022-037 AL Program: 93.767 - Children’s Health Insurance Program Area: Special Tests and Provisions - Provider Eligibility (Screening and Enrollment) Questioned Costs: $7,932,110 Contact Person(s): Geroge J. Cruz, Medicaid Director Corrective Action Plan: CNMI Medicaid Office respectfu...

Finding No.: 2022-037 AL Program: 93.767 - Children’s Health Insurance Program Area: Special Tests and Provisions - Provider Eligibility (Screening and Enrollment) Questioned Costs: $7,932,110 Contact Person(s): Geroge J. Cruz, Medicaid Director Corrective Action Plan: CNMI Medicaid Office respectfully disagrees with the finding. While the office did perform OIG exclusion list validation, screenshots were not captured for each individual check. It is important to note that the OIG Exclusion List portal’s search function is limited to on-screen viewing and does not provide a built-in option to print or export search results. Additionally, the CMS access process for exclusion checks involves a rigorous background clearance, and only one personnel of three total successfully gained access. CNMI Medicaid Office acknowledges that historically, limited personnel capacity has hindered full compliance with this requirement. However, efforts are currently underway to streamline and strengthen the exclusion verification process. The office is actively developing a fully functional Program Integrity Division that will be responsible for conducting and documenting OIG exclusion checks in a consistent and compliant manner moving forward. Proposed Completion Date: Ongoing

View Audit 371187 Questioned Costs: $1

Finding 1161242 (2022-035)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Subrecipient Monitoring Questioned Costs Allowable Costs / Cost Principles § 200.308 § 200.309 § 200.344 § 200.403

Finding No.: 2022-035 AL Program: 93.767 - Children’s Health Insurance Program Area: Period of Performance Questioned Costs: $38,556 Contact Person(s): Geroge J. Cruz, Medicaid Director Corrective Action Plan: The CNMI Medicaid Office respectfully disagrees with this finding. Due to internal schedul...

Finding No.: 2022-035 AL Program: 93.767 - Children’s Health Insurance Program Area: Period of Performance Questioned Costs: $38,556 Contact Person(s): Geroge J. Cruz, Medicaid Director Corrective Action Plan: The CNMI Medicaid Office respectfully disagrees with this finding. Due to internal scheduling constraints and the compressed timeline required to complete the FY22 audit, the requested documents were not submitted by the specified deadline, resulting in this finding. However, the office maintains all relevant supporting documentation and is prepared to provide it upon request from the Grantor. Proposed Completion Date: Ongoing

View Audit 371187 Questioned Costs: $1

Finding 1161241 (2022-034)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Allowable Costs / Cost Principles Questioned Costs Subrecipient Monitoring

Finding No.: 2022-034 AL Program: 93.767 - Children’s Health Insurance Program Area: Activities Allowed or Unallowed and Allowable Costs/Costs Principles Questioned Costs: $1,182,511 Contact Person(s): Geroge J. Cruz, Medicaid Director Corrective Action Plan: Condition 1: The CNMI Medicaid Office re...

Finding No.: 2022-034 AL Program: 93.767 - Children’s Health Insurance Program Area: Activities Allowed or Unallowed and Allowable Costs/Costs Principles Questioned Costs: $1,182,511 Contact Person(s): Geroge J. Cruz, Medicaid Director Corrective Action Plan: Condition 1: The CNMI Medicaid Office respectfully disagrees with this finding. Due to internal scheduling constraints and the compressed timeline required to complete the FY22 audit, the requested documents were not submitted by the specified deadline, resulting in this finding. However, the office maintains all relevant supporting documentation and is prepared to provide it upon request from the Grantor. Proposed Completion Date: Ongoing Condition 2: CNMI Medicaid Office cannot confirm to agree or disagree with the findings stated, as the information references case numbers without sufficient supporting detail. The office does not operate a Medicaid Management Information System (MMIS) and therefore cannot automatically retrieve data to link case numbers with the total benefits paid or questioned costs. Additionally, two of the three case numbers provided are associated with multiple individuals. Even if the case numbers were accurate and beneficiary names included, the office would still need to identify the provider(s) associated with the payments in question. Claims data is maintained manually in Excel spreadsheets, consolidated across beneficiaries, and processed for payment through the MUNIS system using internally generated invoice numbers. These invoice numbers are not linked to specific beneficiaries. Therefore, to properly evaluate the findings, the office would require not only the case number, but also the beneficiary’s full name and the corresponding MUNIS invoice number. The office maintains all relevant supporting documentation and is prepared to provide it upon request from the Grantor. Proposed Completion Date: Ongoing Condition 3: The CNMI Medicaid Office respectfully disagrees with this finding. Due to internal scheduling constraints and the compressed timeline required to complete the FY22 audit, the requested documents were not submitted by the specified deadline, resulting in this finding. However, the office maintains all relevant supporting documentation and is prepared to provide it upon request from the Grantor. Proposed Completion Date: Ongoing

View Audit 371187 Questioned Costs: $1

Finding 1161240 (2022-033)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Questioned Costs Special Tests & Provisions Subrecipient Monitoring

Finding No.: 2022-033 AL Program: 93.489/93.575/93.596 - CCDF Cluster Area: Special Tests and Provisions – Health and Safety Requirements Questioned Costs: $1,757,352 Contact Person(s): Roselle Teregeyo, CCDF Co-Administrator/Accountant Corrective Action Plan: Condition 1: CCDF respectfully disagree...

Finding No.: 2022-033 AL Program: 93.489/93.575/93.596 - CCDF Cluster Area: Special Tests and Provisions – Health and Safety Requirements Questioned Costs: $1,757,352 Contact Person(s): Roselle Teregeyo, CCDF Co-Administrator/Accountant Corrective Action Plan: Condition 1: CCDF respectfully disagrees with this finding. In the middle of the Fiscal year, the CCDF Program transitioned to have the Quality Rating and Improvement System or QRIS perform the announced and unannounced visits. To allow the complete transition of the CCDF Certification and monitoring system, as independent from the Child Care Licensing Program, CCDF extended all expiration dates of CCDF Providers for an additional two months. This extension was given to all CCDF providers renewing from April 2022 to December 31, 2022. With the transition, CCDF allowed for providers to meet provider requirements in a year and were only subjected to an announced visit. Any non-compliance was noted, but supported to compliance through coaching. Effective October 1, 2022, all CCDF Providers are now subjected to announced and unannounced visits. Proposed Completion Date: Completed Condition 2: CCDF respectfully disagrees with this finding. Based on our records, all providers met the annual training hours. Proposed Completion Date: Ongoing

View Audit 371187 Questioned Costs: $1

Finding 1161239 (2022-032)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Questioned Costs Eligibility

Finding No.: 2022-032 AL Program: 93.489/93.575/93.596 – CCDF Cluster Area: Eligibility Questioned Costs: $43,100 Contact Person(s): Roselle Teregeyo, CCDF Co-Administrator/Accountant Corrective Action Plan: Condition 1: For Case ID: 2827C, 2528C, 2936A, 2528B, 3062D: CCDF agrees with these findings...

Finding No.: 2022-032 AL Program: 93.489/93.575/93.596 – CCDF Cluster Area: Eligibility Questioned Costs: $43,100 Contact Person(s): Roselle Teregeyo, CCDF Co-Administrator/Accountant Corrective Action Plan: Condition 1: For Case ID: 2827C, 2528C, 2936A, 2528B, 3062D: CCDF agrees with these findings. To address these findings, effective October 2025, CCDF will not approve applicant/s Certificate of Confirmation without a current and valid work permit. As of January 2025, CCDF Waitlist applications are no longer initially processed by one Eligibility Worker, waitlist applications must be assessed by two eligibility workers to ensure requirements and documents are met. For final approval CCDF waitlist applications are again cross checked by the Eligibility Supervisor to ensure all requirements and documentation are met. CCDF Eligibility staff will assess client files and if needed, will request for current and valid work permits. Proposed Completion Date: December 31, 2025 Condition 2: CCDF agrees with this finding. To address these findings, effective October 2025, CCDF will not approve applicant/s Certificate of Confirmation without a current and valid work permit. As of January 2025, CCDF Waitlist applications are no longer initially processed by one Eligibility Worker, waitlist applications must be assessed by two eligibility workers to ensure requirements and documents are met. For final approval CCDF waitlist applications are again cross checked by the Eligibility Supervisor to ensure all requirements and documentation are met. CCDF Eligibility staff will assess client files and if needed, will request for current and valid work permits. Proposed Completion Date: December 31, 2025 Condition 3: CCDF agrees with this finding. For Case ID 3324B: Total overpayment to provider was $300.00. CCDF will recoup the amount from the provider no later than December 2025. CCDF determined that the overpayment to provider is $300.00. CCDF will recoup $150.00 each month from the provider beginning November 2025 and the whole amount will be recouped by December 2025. As of August 2025, CCDF Provider payments are cross checked by the CCDF Accounting section. Additionally, effective October 1, 2025, CCDF Data Specialist will cross check provider payments to ensure base payment rates are applicable to each child based on the child’s age. Proposed Completion Date: December 31, 2025

View Audit 371187 Questioned Costs: $1

Finding 1161232 (2022-031)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Questioned Costs Subrecipient Monitoring § 200.331 § 200.332 § 200.415 § 200.513 § 200.521

Finding No.: 2022-031 AL Program: 21.027 - Coronavirus State and Local Fiscal Recovery Funds Area: Subrecipient Monitoring Questioned Costs: $61,003,095 Contact Person(s): Tracy B. Norita, Secretary of Finance Corrective Action Plan: Condition 1-3: The Department of Finance agrees with this finding....

Finding No.: 2022-031 AL Program: 21.027 - Coronavirus State and Local Fiscal Recovery Funds Area: Subrecipient Monitoring Questioned Costs: $61,003,095 Contact Person(s): Tracy B. Norita, Secretary of Finance Corrective Action Plan: Condition 1-3: The Department of Finance agrees with this finding. The Department has recently adopted and approved (August 2025) a Subrecipient Monitoring Policy and Procedures which specifically focused on the implementation of 2 CFR 200.331. The Department will expand on this policy and procedure to include the development and implementation of a comprehensive subrecipient monitoring policies that clearly outline the process for identifying subawards, assessing the risk of noncompliance, and conducting monitoring activities based on those risks. These policies will be aligned with federal requirements and best practices to ensure consistency and accountability. Furthermore, due to internal scheduling constraints and the compressed timeline required to complete the FY22 audit, the requested documents were not submitted by the specified deadline, resulting in this finding. However, the Department maintains all relevant supporting documentation and is prepared to provide it upon request from the Grantor. Proposed Completion Date: Ongoing

View Audit 371187 Questioned Costs: $1

Finding 1161231 (2022-030)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Questioned Costs Subrecipient Monitoring Reporting

Finding No.: 2022-030 AL Program: 21.027 - Coronavirus State and Local Fiscal Recovery Funds Area: Reporting Questioned Costs: $-0- Contact Person(s): Tracy B. Norita, Secretary of Finance Corrective Action Plan: Condition 1-3: The Department of Finance agrees with this finding. It is important to n...

Finding No.: 2022-030 AL Program: 21.027 - Coronavirus State and Local Fiscal Recovery Funds Area: Reporting Questioned Costs: $-0- Contact Person(s): Tracy B. Norita, Secretary of Finance Corrective Action Plan: Condition 1-3: The Department of Finance agrees with this finding. It is important to note that the issue occurred during FY22, a period marked by the transition from the legacy financial system (JDE) to the new Tyler Munis platform. During this time, processes for retaining and reconciling supporting documents had not been standardized, resulting in inconsistencies and a heightened risk of missing or improperly uploaded records. Furthermore, the Program Manager previously responsible for overseeing this grant is no longer with the Department. Due to internal scheduling constraints and the compressed timeline required to complete the FY22 audit, the requested documents were not submitted by the specified deadline, which contributed to this finding. Nevertheless, the Department is committed to provide relevant supporting documentation upon request from the Grantor. Proposed Completion Date: Ongoing.

View Audit 371187

Finding 1161230 (2022-029)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Questioned Costs Procurement, Suspension & Debarment § 200.237 § 200.317 § 200.321 § 200.327

Finding No.: 2022-029 AL Program: 21.027 - Coronavirus State and Local Fiscal Recovery Funds Area: Procurement and Suspension and Debarment Questioned Costs: $12,244,415 Contact Peron(s): Tracy B. Norita, Secretary of Finance / Geraldine Cruz, Procurement Services Director Corrective Action Plan: Co...

Finding No.: 2022-029 AL Program: 21.027 - Coronavirus State and Local Fiscal Recovery Funds Area: Procurement and Suspension and Debarment Questioned Costs: $12,244,415 Contact Peron(s): Tracy B. Norita, Secretary of Finance / Geraldine Cruz, Procurement Services Director Corrective Action Plan: Condition 1&3: The Procurement Services Division agrees with this finding. The Division will revise CNMI’s procurement regulations to ensure alignment with federal procurement standards as outlined in 2 CFR Part 200, particularly the small purchase threshold requirements and competitive procurement procedures. Proposed Completion Date: Policy updates drafted by December 31, 2025 and adopted by March 31, 2026. Condition 2&5: The Procurement Services Division agrees with this finding. To address the lack of consistent verification of vendor eligibility under federal debarment and suspension requirements (2 CFR §180.300), a policy will be implemented requiring all agencies to submit debarment verification documentation at the time of vendor selection. Acceptable documentation may include (1) a printout or screenshot from the SAM.gov Exclusions database, confirming that the vendor is not debarred or suspended, (2) a signed certification from the vendor attesting to their eligibility, or (3) a signed contract clause or provision that explicitly states the vendor is not excluded from federal transactions and complies with applicable debarment regulations. Procurement procedures and standard forms will be revised to include debarment verification as a mandatory step prior to any purchase approval involving federal funds. Procurement Services will ensure that debarment verification documents are maintained in the official procurement file for each transaction involving federal funds. Proposed Completion Date: October 1, 2025 Condition 4&6: The Procurement Services Division respectfully disagrees with this finding. Due to internal scheduling constraints and the compressed timeline required to complete the FY22 audit, the requested documents were not submitted by the specified deadline, resulting in this finding. However, the Division maintains all relevant supporting documentation and is prepared to provide it upon request from the Grantor. Proposed Completion Date: Ongoing

View Audit 371187 Questioned Costs: $1

Finding 1161229 (2022-028)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Questioned Costs Allowable Costs / Cost Principles Reporting § 200.1

Finding No.: 2022-028 AL Program: 21.027 - Coronavirus State and Local Fiscal Recovery Funds Area: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Questioned Costs: $33,815,438 Contact Person(s): Tracy B. Norita, Secretary of Finance Corrective Action Plan: Condition 1&6: The Dep...

Finding No.: 2022-028 AL Program: 21.027 - Coronavirus State and Local Fiscal Recovery Funds Area: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Questioned Costs: $33,815,438 Contact Person(s): Tracy B. Norita, Secretary of Finance Corrective Action Plan: Condition 1&6: The Department of Finance agrees with this finding. It is important to note that the issue occurred during FY22, a period marked by the transition from the legacy financial system (JDE) to the new Tyler Munis platform. During this time, processes for retaining and reconciling supporting documents had not been standardized, resulting in inconsistencies and a heightened risk of missing or improperly uploaded records. Furthermore, the Program Manager previously responsible for overseeing this grant is no longer with the Department. Due to internal scheduling constraints and the compressed timeline required to complete the FY22 audit, the requested documents were not submitted by the specified deadline, which contributed to this finding. Nevertheless, the Department is committed to provide relevant supporting documentation upon request from the Grantor. Proposed Completion Date: Ongoing Condition 2-5, 7&8: The Department of Finance respectfully disagrees with this finding. Due to internal scheduling constraints and the compressed timeline required to complete the FY22 audit, the requested documents were not submitted by the specified deadline, resulting in this finding. However, the office maintains all relevant supporting documentation and is prepared to provide it upon request from the Grantor. Proposed Completion Date: Ongoing Condition 9: The Department of Finance agrees with the findings. Following the legal opinion from the CNMI Attorney General’s Office in August 2025, we secured all necessary documentation from the Municipality of Tinian to ensure proper recording and reconciliation of transactions in our financial system. Proposed Completion Date: December 31, 2025

View Audit 371187 Questioned Costs: $1

Finding 1161228 (2022-027)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Questioned Costs Subrecipient Monitoring § 200.331 § 200.332

Finding No.: 2022-027 AL Program: 21.026 - Homeowner Assistance Fund Program Area: Subrecipient Monitoring Questioned Costs: $4,157,924 Contact Person(s): Tracy B. Norita, Secretary of Finance Corrective Action Plan: Condition 1-4: The Department of Finance agrees with this finding. The Department h...

Finding No.: 2022-027 AL Program: 21.026 - Homeowner Assistance Fund Program Area: Subrecipient Monitoring Questioned Costs: $4,157,924 Contact Person(s): Tracy B. Norita, Secretary of Finance Corrective Action Plan: Condition 1-4: The Department of Finance agrees with this finding. The Department has recently adopted and approved (August 2025) a Subrecipient Monitoring Policy and Procedures which specifically focused on the implementation of 2 CFR 200.331. The Department will expand on this policy and procedure to include the development and implementation of a comprehensive subrecipient monitoring policies that clearly outline the process for identifying subawards, assessing the risk of noncompliance, and conducting monitoring activities based on those risks. These policies will be aligned with federal requirements and best practices to ensure consistency and accountability. Proposed Completion Date: December 31, 2025

View Audit 371187 Questioned Costs: $1

Finding 1161227 (2022-026)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Questioned Costs Subrecipient Monitoring Reporting

Finding No.: 2022-026 AL Program: 21.026 - Homeowner Assistance Fund Program Area: Reporting Questioned Costs: $-0- Contact Person(s): Zenie Mafnas, NMHC Director / Tracy B. Norita, Secretary of Finance Corrective Action Plan: The CNMI agrees with this finding. Department of Finance Program Manager ...

Finding No.: 2022-026 AL Program: 21.026 - Homeowner Assistance Fund Program Area: Reporting Questioned Costs: $-0- Contact Person(s): Zenie Mafnas, NMHC Director / Tracy B. Norita, Secretary of Finance Corrective Action Plan: The CNMI agrees with this finding. Department of Finance Program Manager previously responsible for overseeing this grant is no longer with the Department. DOF will work with NMHC to verify whether the required FFATA reports and any other required activities were prepared and submitted to the Subaward Reporting System. Proposed Completion Date: Ongoing

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Finding 1161225 (2022-024)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Questioned Costs Allowable Costs / Cost Principles § 200.344 § 200.403

Finding No.: 2022-024 AL Program: 21.023 - Emergency Rental Assistance Program Area: Period of Performance Questioned Costs: $26,329 Contact Person(s): Epiphanio Cabrera, Jr., Grants Administrator, OGM-SC Corrective Action Plan: Condition 1: The Office of Grant Management (OGM) respectfully disagree...

Finding No.: 2022-024 AL Program: 21.023 - Emergency Rental Assistance Program Area: Period of Performance Questioned Costs: $26,329 Contact Person(s): Epiphanio Cabrera, Jr., Grants Administrator, OGM-SC Corrective Action Plan: Condition 1: The Office of Grant Management (OGM) respectfully disagrees with this finding. OGM recollects prior guidance and program discussions indicating that U.S. Territories administering ERA were afforded greater flexibility in the period of performance, in recognition of their geographic remoteness and the additional time required to receive technical assistance and implement compliant systems. This understanding informed OGM’s administration of ERA funds. Additionally, several disbursed checks were returned, which created reconciliation delays and made it difficult to ascertain the true unobligated balance of the grant until sufficient time had passed for all transactions to clear. To address compliance concerns, CNMI officials traveled to Washington, D.C. in February 2025 to meet with U.S. Treasury representatives and resolve outstanding ERA1 documentation issues. Following those meetings, OGM submitted the necessary reports and initiated the closeout process for ERA1 in accordance with federal requirements. The questioned cost of $26,329 reflects expenditures that were directed toward eligible households impacted by COVID-19. These expenditures were necessary, reasonable, and allocable under 2 CFR 200.403, and fully aligned with the statutory purpose of ERA to prevent housing instability. Disallowing these costs would effectively negate assistance that was properly delivered to beneficiaries and undermine the program’s objective. For these reasons, OGM respectfully requests that the questioned cost be removed. Proposed Completion Date: Ongoing Condition 2: The Office of Grant Management (OGM) respectfully disagrees with this finding. Due to internal scheduling constraints and the compressed timeline required to complete the FY22 audit, the requested documents were not submitted by the specified deadline, resulting in this finding. However, OGM maintain all relevant supporting documentation and is prepared to provide it upon request from the Grantor. Proposed Completion Date: Ongoing

View Audit 371187 Questioned Costs: $1

Finding 1161224 (2022-023)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Questioned Costs Allowable Costs / Cost Principles Eligibility

Finding No.: 2022-023 AL Program: 21.023 - Emergency Rental Assistance Program Area: Eligibility Questioned Costs: $331,985 Contact Person(s): Epiphanio Cabrera, Jr., Grants Administrator, OGM-SC Corrective Action Plan: The Office of Grant Management (OGM) respectfully disagrees with this finding. T...

Finding No.: 2022-023 AL Program: 21.023 - Emergency Rental Assistance Program Area: Eligibility Questioned Costs: $331,985 Contact Person(s): Epiphanio Cabrera, Jr., Grants Administrator, OGM-SC Corrective Action Plan: The Office of Grant Management (OGM) respectfully disagrees with this finding. The delay in document submission was attributable to internal scheduling constraints combined with the compressed timeline required to complete the FY2022 Single Audit. While the requested documentation was not provided by the auditor’s specified deadline, OGM maintains all relevant supporting records in accordance with federal grant retention requirements and remains prepared to furnish them upon request from the Grantor. Although the documentation was submitted several days beyond the deadline, the auditors informed OGM that reviewing the late submission would cause additional delays to the overall audit process. OGM disputes the questioned cost amount of $331,985, as complete and accurate records exist to substantiate the eligibility determinations of the CCERA clients in question. Given that the program concluded more than two years ago, additional time was necessary to retrieve and compile archived files. Accordingly, OGM asserts that these costs are allowable, allocable, and fully supported, and recommends that the auditors reconsider the finding in light of the shortened audit review window and the program’s recordkeeping context. Proposed Completion Date: Ongoing

View Audit 371187 Questioned Costs: $1

Finding 1161223 (2022-022)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Questioned Costs Allowable Costs / Cost Principles

Finding No.: 2022-022 AL Program: 21.023 - Emergency Rental Assistance Program Area: Allowable Costs/Cost Principles Questioned Costs: $65,865 Contact Person(s): Epiphanio Cabrera, Jr., Grants Administrator, OGM-SC Corrective Action Plan: The Office of Grant Management (OGM) respectfully disagrees w...

Finding No.: 2022-022 AL Program: 21.023 - Emergency Rental Assistance Program Area: Allowable Costs/Cost Principles Questioned Costs: $65,865 Contact Person(s): Epiphanio Cabrera, Jr., Grants Administrator, OGM-SC Corrective Action Plan: The Office of Grant Management (OGM) respectfully disagrees with this finding. In alignment with program intent and to ensure housing stability, rental arrears were prioritized and satisfied first. However, in cases where households faced imminent risk of eviction, OGM permitted the submission of concurrent prospective rent payments as an emergency stabilization measure. This approach was necessitated by the protracted processing timelines within the Division of Financial Services, which created a critical lag between approval and disbursement of funds. Without this intervention, households would have been exposed to heightened risk of eviction, undermining the program’s primary objective of preventing homelessness. Accordingly, the rental arrears totaling $65,864 should be deemed an allowable and reasonable program expenditure consistent with the overarching goals of housing retention and client stabilization. Proposed Completion Date: Ongoing

View Audit 371187 Questioned Costs: $1

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