Corrective Action Plans

Management disagrees with the following A) Management determined the expenditures charged to the 2021-#3 project MSOC Security Sustainment Costs, for camera, installation and project management were clearly related to the Investment justification which requested sustainment and upgrade to the existing MSOC the IJ states : “Investment provides maintenance and upgrades of software/hardware (I.e. servers/workstations), video surveillance management systems, operating systems, cameras systems, access control and communication systems for Plaquemines Port Harbor and Terminal District B) Management determined the questioned cost charged to the 2023-#3 project GIS for the cameras and the conference room were supported with the investment justification however management agrees the invoices for Survey totaling $95,900 should not have been changed to the grant. C) Management determined the expenditures charged to the 2023-#4 project Cybersecurity Network and IT: For Datto Backup, which is the name of the program, and cyber security training are valid expenses and align with the investment justification Management will ensure the following processes are added to the financial management policies and procedures over federal and state funds • The District will establish formal procedures requiring that all PSGP expenditures be cross-checked against the approved Investment Justification (IJ) and verified for compliance with the grant’s period of performance prior to payment. No disbursement of federal funds will occur unless documentation demonstrates that the expenditure directly aligns with the approved grant scope and timing. • This documentation will be required within the system in order to process payments to the vendor. • The District will consult with FEMA to assess the allowability of identified questioned costs. Management will follow FEMA’s guidance to resolve any discrepancies and ensure that all expenditures meet federal standards. • Mandatory training sessions are being scheduled for staff involved in grant administration and financial management. These sessions will cover Uniform Guidance requirements, documentation standards, and procedures for verifying expenditure eligibility under PSGP. These actions reflect the District’s commitment to regulatory compliance, fiscal responsibility, and continuous improvement in federal grant management practices.

The Organization will revisit the internal control process around invoice submissions and reimbursement request review. The Organization has since hired an outsourced accountant to assist with record keeping and assisting with ensuring compliance with Uniform Guidance. The Organization strives to remain compliant with Uniform Guidance in all respects to present both accurate and transparent records. If the Missouri Department of Social Services or the U.S. Department of the Treasury have questions regarding this plan, please call Jennifer Gadsky, MSW, LCSW, Executive Director, at (314)-938-4414.

United States Department of Education Student Financial Aid Cluster – Assistance Listing No. 84.063 Condition: During our audit procedures, we noted that the 1 student withdrawal did not have a return to Title IV calculation completed timely as the student officially withdrew 8/29/23 and the calculation was not completed until 3/24/25. We also noted that the calculation that was performed did not include documentation of the control process to review and approve the calculations prior to changes being made to the student’s award. Auditors’ Recommendation: We recommend the institution maintain proper documentation in accordance with federal grantor requirements and ensure that the documents are readily available for review upon request, including monitoring of students with triggering events that require a return to Title IV calculation to be completed, reviewed, and approved. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The University has implemented a new SIS and Financial Aid processing system. Name(s) of the contact person(s) responsible for corrective action: Qiana Hall, Associate VP of Enrollment Services Planned completion date for corrective action plan: June 30, 2025

United States Department of Education Student Financial Aid Cluster – Assistance Listing No. 84.007, 84.033, 84.063, 84.268 Condition: Student checks related to student refunds of Title IV federal financial aid was outstanding more than 240 days as of June 30, 2024. Auditors’ Recommendation: We recommend that the University review its procedures related to outstanding student refund checks to ensure they are being returned to the Department of Education after 240 days. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The University engaged an external consultant in June 2023, hired a new staff accountant in September 2023 and a CFO in November 2023. The University is implementing financial internal controls policies and processes to improve the financial statements preparation and preparation of the schedule of expenditures and federal awards and ensure compliance with the DOE. This includes procedures related to outstanding student refund checks over 240 days. Name(s) of the contact person(s) responsible for corrective action: Denise Johnson, Interim Controller, Bursar Dept. Supervisor Planned completion date for corrective action plan: June 30, 2025

Cause: Costs charged on the vendor invoice were not separated between allowable activity, broadband infrastructure development, and unallowable activity, electrical infrastructure development. Corrective Action Plan: “The corrective action has already been taken prior to audit completion. The costs related to unallowable activities have been reimbursed to the grant in the form of an offset against May 2025 draw to correct the error. All project expenditures incurred to date were reviewed to confirm there were no additional unallowable charges. Training was provided to contractors and subcontractors involved with the project to ensure a thorough understanding of the importance of maintaining separate accounting records for grant and non-grant projects. Furthermore, all personnel involved in grant administration, including project managers and finance staff, are required to attend training on federal grant compliance. Going forward, project and support teams will perform a more comprehensive review of project invoices and billing details as well as monitor project’s spend variances more closely to ensure grant compliance.”

We have changed the process so all contracts are collected at the SAU central office to ensure completeness.

Due to staff turnover, additional training was provided to the person that prepares the MOE. FY25 MOEs are complete. The DOE contacts us if they are completed incorrectly. The DOE did not have any issue with the FY25 report, and all grants have been approved.

The audit finding was reviewed with the new assistant superintendent that oversees grants to ensure certifications are completed going forward. The SAU senior leadership team reorganized and moved the grant management responsibiltiies to a member of the senior leadership team.

Student Financial Assistance Cluster – Assistance Listing No. 84.268, 84.063, 84.007, 84.033 Recommendation: We recommend the College strengthen its internal controls to ensure timely identification of students not meeting SAP standards. Additionally, the College should work with its system administrator to resolve the SAP calculation issue or implement an alternative method for tracking SAP compliance. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: CGCC has completed a thorough review of its Satisfactory Academic Progress (SAP) policy to ensure alignment with the capabilities and limitations of our current system. We remain committed to resolving ongoing system-related issues and are actively keeping the policy and system functionality in sync as improvements are made. The issue regarding SAP not calculating correctly is still in progress. We have been working closely with Anthology to identify and implement long-term solutions. Unfortunately, the necessary fixes require significant time and manual intervention. Despite these challenges, we have made progress: as of Spring 2025, we are now able to accurately identify affected students—something that was not possible during the 2023–2024 award year. Additionally, we are in the process of hiring a Financial Aid Director. This added leadership and support will help us address the remaining issues more efficiently and continue making meaningful progress toward full resolution Name(s) of the contact person(s) responsible for corrective action: Denise Reid-Strachan Planned completion date for corrective action plan: 9/1/2025

CORRECTIVE ACTION PLANS Oversight Agency for Audit: U.S. Department of the Treasury The City of Haverhill, Massachusetts respectfully submits the following corrective action plans for the year ended June 30, 2024. Name and address of the independent public accounting firm: CBIZ CPAs P.C. 9 Executive Park Drive, Suite 100 Merrimack, NH 03054 Audit Period: July 1, 2023, through June 30, 2024 The findings from the June 30, 2024, schedule of findings and responses are discussed below. The findings are numbered consistently with the number assigned in the schedule. Finding 2024-005: Improve Controls and Documentation Over Allowability of Costs Federal Agency: U.S. Department of Education Award Name(s): Twenty-First Century Community Learning Centers Assistance Listing Number(s): 84.287, 84.287C Award Year: 2023, 2024 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Compliance Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement: Grantees must provide reasonable assurance that federal awards are expended only for allowable activities and that the costs of goods and services charged to federal awards are allowable and in accordance with the applicable cost principles. Management of the City is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. The Code of Federal Regulations Section 200.403(g) states that for costs to be allowable under Federal awards, they must be adequately documented and there must be sufficient documentation. Condition and Context: A sample of payroll expenditures were tested in order to determine if costs were allowable and adequately approved. As a result of our testing, it was determined that one payroll transaction had no timesheet approval, and one payroll transaction was self-approved. Payroll expenditures charged to the programs are required to be supported with documentation substantiating that the employees are eligible to be charged to the grant and that the payroll charged relates to time spent accomplishing grant objectives. This supporting documentation should be standardized and should include all required elements in accordance with applicable cost principles. Cause: The City did not have adequate controls in place to provide sufficient documentation to demonstrate compliance with federal and state time and effort reporting requirements. Effect or Potential Effect: Due to the weakness in internal controls and compliance noted above, there is a risk that amounts charged to federal awards may not be allowable or in accordance with applicable cost principles. Questioned Costs: Due to the condition noted above, we were unable to determine if the costs charged to the applicable grants are allowable. AL Number(s) Name of Federal Program or Cluster Questioned Costs 84.287, 84.287C Twenty-First Century Community Learning Centers $5,450 Recommendation: Management should enhance procedures and controls in place over the time and effort reporting and documentation requirements that department heads must adhere with to ensure compliance with federal and state time and effort reporting requirements. Views of Responsible Official: The School Department recognizes the weaknesses identified in grants management, as well as in the approval and allocation of allowable costs. To address these issues, the School Department has recently hired a new Business Manager/Chief Financial Officer (CFO). This individual is responsible for implementing appropriate internal controls that align with Best Practices, particularly in key areas such as invoice approval, payroll approval, grants management, and procurement compliance. To ensure ongoing improvement, training will be provided continuously for all staff members responsible for managing federal grants. This training will include; • Procedures to reconcile internal records with federal and state reports. • Maintain a process to ensure that costs charged to grants are allowable, necessary and reasonable, and properly allocated, and that these determinations are made in a consistent manner. • Determine whether indirect costs will be allocated to grant programs, and if so, maintain an appropriate process to make the allocation. • Maintain a process to track information about local matching funds, including identification of the source of such funds. • Identify and segregate costs as necessary for the grant (e.g., separate allowable and unallowable costs, separate direct costs from indirect costs, and separate administrative costs. • Account for and track grant-funded capital items. • Document grant procedures. • Maintain a comprehensive list of reporting requirements and a reminder system for meeting the reporting deadlines. • Identify who is responsible for the various reporting requirements. • Establish methodologies for the preparation of specialized reports. • Establish processes for obtaining all of the information needed for the Schedule of Expenditures of Federal Awards (SEFA). • Develop and document an understanding of audit requirements specific to grants, including those in Generally Accepted Government Auditing Standards (GAGAS), Generally Accepted Auditing Standards (GAAS), and Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). • Develop and document an understanding of audit requirements for grant close-outs. • Report if any process or internal control issues identified were resolved.

CORRECTIVE ACTION PLANS Oversight Agency for Audit: U.S. Department of the Treasury The City of Haverhill, Massachusetts respectfully submits the following corrective action plans for the year ended June 30, 2024. Name and address of the independent public accounting firm: CBIZ CPAs P.C. 9 Executive Park Drive, Suite 100 Merrimack, NH 03054 Audit Period: July 1, 2023, through June 30, 2024 The findings from the June 30, 2024, schedule of findings and responses are discussed below. The findings are numbered consistently with the number assigned in the schedule. Finding 2024-004: Improve Controls and Documentation Over Allowability of Costs Federal Program Information Federal Agency: U.S. Department of Education Award Name(s): Title I Grants to Local Educational Agencies Assistance Listing Number(s): 84.010 Award Year: 2023, 2024 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Award Name(s): COVID-19 – Education Stabilization Fund Assistance Listing Number(s): 84.425 Award Year: 2022 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Award Name(s): Twenty-First Century Community Learning Centers Assistance Listing Number(s): 84.287, 84.287C Award Year: 2023, 2024 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Award Name(s): Special Education Cluster Assistance Listing Number(s): 84.027, 84.173 Award Year: 2023 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Compliance Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement: Grantees must provide reasonable assurance that federal awards are expended only for allowable activities and that the costs of goods and services charged to federal awards are allowable and in accordance with the applicable cost principles. Management of the City is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. The Code of Federal Regulations Section 200.403(g) states that for costs to be allowable under Federal awards, they must be adequately documented and there must be sufficient documentation. Condition and Context: A sample of invoices were tested in order to determine if costs were allowable and adequately approved. As a result of our testing, it was determined that invoices were not approved for two transactions in the Title I Grants to Local Educational Agencies program and three invoices in the COVID-19 Education Stabilization Fund program. In addition, invoices were not able to be provided for three invoices in the COVID-19 Education Stabilization Fund program, one invoice in the Twenty-First Century Community Learning Centers program, and one invoice in the Special Education Cluster. Cause: The City did not have adequate controls in place to ensure invoices were properly approved and retained. Effect or Potential Effect: Due to the weakness in internal controls and compliance noted above, there is a risk that amounts charged to federal awards may not be allowable or in accordance with applicable cost principles. Questioned Costs: Due to the condition noted above, we were unable to determine if the costs charged to the applicable grants are allowable. AL Number(s) Name of Federal Program or Cluster Questioned Costs 84.010 Title I Grants to Local Educational Agencies $82,488 84.425 COVID-19 Education Stabilization Fund $136,876 84.287, 84.287C Twenty-First Century Community Learning Centers $1,305 84.027/84.173 Special Education Cluster $1,945 Recommendation: The City should enhance internal controls over the invoice approval and retention process in order to provide reasonable assurance that federal award transactions are allowable and in accordance with the applicable cost principles. Views of Responsible Official: The School Department recognizes the weaknesses identified in grants management, as well as in the approval and allocation of allowable costs. To address these issues, the School Department has recently hired a new Business Manager/Chief Financial Officer (CFO). This individual is responsible for implementing appropriate internal controls that align with Best Practices, particularly in key areas such as invoice approval, payroll approval, grants management, and procurement compliance. To ensure ongoing improvement, training will be provided continuously for all staff members responsible for managing federal grants. This training will include; • Procedures to reconcile internal records with federal and state reports. • Maintain a process to ensure that costs charged to grants are allowable, necessary and reasonable, and properly allocated, and that these determinations are made in a consistent manner. • Determine whether indirect costs will be allocated to grant programs, and if so, maintain an appropriate process to make the allocation. • Maintain a process to track information about local matching funds, including identification of the source of such funds. • Identify and segregate costs as necessary for the grant (e.g., separate allowable and unallowable costs, separate direct costs from indirect costs, and separate administrative costs. • Account for and track grant-funded capital items. • Document grant procedures. • Maintain a comprehensive list of reporting requirements and a reminder system for meeting the reporting deadlines. • Identify who is responsible for the various reporting requirements. • Establish methodologies for the preparation of specialized reports. • Establish processes for obtaining all of the information needed for the Schedule of Expenditures of Federal Awards (SEFA). • Develop and document an understanding of audit requirements specific to grants, including those in Generally Accepted Government Auditing Standards (GAGAS), Generally Accepted Auditing Standards (GAAS), and Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). • Develop and document an understanding of audit requirements for grant close-outs. • Report if any process or internal control issues identified were resolved.

CORRECTIVE ACTION PLANS Oversight Agency for Audit: U.S. Department of the Treasury The City of Haverhill, Massachusetts respectfully submits the following corrective action plans for the year ended June 30, 2024. Name and address of the independent public accounting firm: CBIZ CPAs P.C. 9 Executive Park Drive, Suite 100 Merrimack, NH 03054 Audit Period: July 1, 2023, through June 30, 2024 The findings from the June 30, 2024, schedule of findings and responses are discussed below. The findings are numbered consistently with the number assigned in the schedule. Finding 2024-006: Improving Controls over Procurement Requirements Federal Agency: U.S. Department of Education Award Name(s): Special Education Cluster Assistance Listing Number(s): 84.027, 84.173 Award Year: 2024 Compliance Requirement: Procurement and Suspension and Debarment Type of Finding: Compliance Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement: Per Uniform Guidance, all non-federal entities must follow documented procurement procedures which ensure that purchases are made in compliance with applicable federal, state, and local laws and regulations. Uniform Guidance does not provide an exemption for special education services from these requirements. Condition and Context: During the audit of federal expenditures, we noted that the City did not properly procure special education services provided by The Academy in accordance with the procurement standards set forth in 2 CFR Part 200 (Uniform Guidance). The City used a “blanket” purchase order for these services but did not formally conduct a competitive procurement process. Cause: The City was not aware that special education costs incurred under federal awards are not exempt from Uniform Guidance procurement requirements. As a result, the City did not initiate a formal procurement process for The Academy and relied on a blanket purchase order. Effect or Potential Effect: Failure to follow the required procurement procedures increases the risk of noncompliance with federal regulations and results in potential questioned costs. Questioned Costs: $101,963. Recommendation: The City should strengthen its controls and staff training regarding federal procurement requirements. Specifically, the City should ensure all purchases of professional services, including special education services, are subject to the appropriate procurement procedures under Uniform Guidance, and that documentation of competitive selection or other required steps is maintained. Views of Responsible Official: The audit revealed deficiencies in the procurement process, including an instance where a service that should have been competitively bid was not. There appeared to be confusion regarding proper practices, especially in areas such as special education and grant-funded purchases. In May 2025, the School Department hired a new Business Manager/CFO. This individual has acknowledged that the previous approach prioritized expediency over compliance. He stated, “This is not a strategy that will be employed under my leadership.” To enhance oversight, the Business Manager/CFO is currently pursuing procurement certification to ensure that all purchases undergo proper review and compliance checks before reaching the City Procurement Officer. At the beginning of the new fiscal year, he centralized the authority to approve or edit purchase orders, eliminating this ability for multiple staff members, including the Grants Manager, Assistant Business Manager, Assistant Superintendent of Operations (a position that no longer exists but was present during the period in question), and Budget Analyst. As a result, purchase orders can no longer be modified without proper authorization, and blanket purchase orders have been nearly eliminated. Now, any expenditure exceeding the applicable threshold must include three quotes prior to approval, along with any additional requirements based on the value. Furthermore, all payments must go through the accounting purchase order system or be physically signed and approved by the Business Manager/CFO with assigned account coding. This marks a significant change from past practices, where invoices were sometimes paid without proper approval. Finally, the Business Manager/CFO is now reviewing all existing contracts to ensure they comply with procurement requirements.

Finding No.: 2024-002 For procurements using federal funds, GMHA is permitted to use a Simplified Acquisition Threshold up to the federal limit, which is currently set at $250,000 or $7.5 million for commercial goods. The Code of Federal Regulations (CFR) permits a non-federal entity to use a SAT up to the federal limits, without having to follow threshold limitations imposed by state or local law. The set of criteria employed by the Ernst & Young is incomplete, and fails to give proper deference to the legal opinions of licensed attorneys. In determining to follow the federal SAT, GMHA considered the guidance of a memorandum from the Office of the Attorney General indicating substantively the same legal analysis as follows. See Memorandum from Deputy Attorney General, Solicitor Division to Chief Deputy Attorney General, Federal Simplified Acquisition Threshold and Micro-purchase Threshold, Ref: AG 22-0410 (Sept. 14, 2022). When presented with this memorandum, the auditors refused to accept its instructions stating: “We were unable to follow why the Attorney General considered the definition of a non-Federal entity in applying the requirements of §§ 200.318 through 200.327. In reviewing the aforementioned sections, there was no reference to non-Federal entities.” This statement evidences the auditors’ fundamental misunderstanding of the law. The auditors based their analysis on an amended version of the CFR, which became effective only January 2025. According the definitions in the Code of Federal Regulations in effect during the relevant 2023-2024 audit period, Guam is both a “State” and a “Non-Federal entity.” Guam Memorial Hospital Authority also falls within the definition of “Hospital” and “subrecipient.” As relevant here, 2 CFR 200.1 states: State means any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, U.S. Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, and any agency or instrumentality thereof exclusive of local governments. Non-Federal entity (NFE) means a State, local government, Indian Tribe, Institution of Higher Education (IHE), or nonprofit organization that carries out a Federal award as a recipient or subrecipient. Hospital means a facility licensed as a hospital under the law of any State or a facility operated as a hospital by the United States, a State, or a subdivision of a State. Subrecipient means an entity, usually but not limited to non-Federal entities, that receives a subaward from a pass-through entity to carry out part of a Federal award; but does not include an individual that is a beneficiary of such award. A subrecipient may also be a recipient of other Federal awards directly from a Federal awarding agency. As a Non-Federal entity, GMHA also is required to abide by the definition of “simplified acquisition threshold.” According to 2 CFR 200.1: Simplified acquisition threshold means the dollar amount below which a non-Federal entity may purchase property or services using small purchase methods (see § 200.320). Non-Federal entities adopt small purchase procedures in order to expedite the purchase of items at or below the simplified acquisition threshold. The simplified acquisition threshold for procurement activities administered under Federal awards is set by the FAR at 48 CFR part 2, subpart 2.1. The non-Federal entity is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk, and its documented procurement procedures. However, in no circumstances can this threshold exceed the dollar value established in the FAR (48 CFR part 2, subpart 2.1) for the simplified acquisition threshold. Recipients should determine if local government laws on purchasing apply. (emphasis added). This definition applies to purchasing by all non-federal entities—including GMHA. Title 2 CFR 200.317 provides: When procuring property and services under a Federal award, a State must follow the same policies and procedures it uses for procurements from its non-Federal funds. The State will comply with §§ 200.321, 200.322, and 200.323 and ensure that every purchase order or other contract includes any clauses required by § 200.327. All other non-Federal entities, including subrecipients of a State, must follow the procurement standards in §§ 200.318 through 200.327. (emphasis added). As a subrecipient of Guam, GMHA would also be required to follow 2 CFR 200.320(a)(2)(ii), which reiterates that: “The non-Federal entity is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk and its documented procurement procedures which must not exceed the threshold established in the FAR.” The CFR treats the requirement that a state or local entity follow (1) its own “policies and procedures” and (2) its own small purchase “threshold” as separate requirements. The CFR applicable to most federal funds—including ARPA—only requires the hospital to follow the local “policies and procedures.” 2 CFR 200.317. The CFR requires GMHA—as a non-federal entity—to separately make a determination of an appropriate small purchase threshold based on a number of factors specific to GMHA, provided it does not exceed the federal SAT. 2 CFR 200.1; 2 CFR 200.320(a)(2)(ii). Procurement method selection is essentially a two-step process: (1) Make a substantive determination about the monetary cost of a proposed procurement and determine whether it is below or above an applicable threshold. Which side of a threshold a procurement falls on (and some other factors) will determine the method—sole source, RFQ, RFP, IFB—that will be used. (2) After the method is determined, an entity is then pointed to specific policies and procedures applicable to that type of procurement. The relevant factors for determining a recipient-specific SAT include an entity’s “internal controls, an evaluation of risk, and its documented procurement procedures.” 2 CFR 200.1; 2 CFR 200.320(a)(2)(ii). For a portion of the relevant procurement period, the CFR also stated: “When applicable, a lower simplified acquisition threshold used by the non-Federal entity must be authorized or not prohibited under State, local, or tribal laws or regulations.” This section was amended effective approximately October 1, 2024. Now, it no longer requires the recipient or sub-recipient to ascertain whether this entity-specific threshold is “authorized or not prohibited under State, local, or tribal laws or regulations.” But even under the prior version, the entity only needed to consider the authorization or lack of prohibition under state or local law if it was adopting a “lower simplified acquisition threshold” than the federal SAT. 2 CFR 200.320(a)(2)(ii) (effective until Sept. 30, 2024) (emphasis added). GMHA determined that the federal SAT levels were appropriate, and—in any event—local law does not prohibit GMHA from adopting the federal SAT when using federal funds. GMHA’s use of the federal SAT for procurements using federal funds has been a decades long practice of our materials management, so a suggestion that it is unauthorized would be a finding quite inconsistent with GMHA’s internal controls. Highlighting the distinctness or difference between the “policies and procedures” and “threshold” requirements, is the fact that “simplified acquisition procedures” and “simplified acquisition threshold” are defined separately. See 48 CFR 2.101. And the two requirements are discussed separately in the section of the CFR discussing “informal procurement methods.” 2 CFR 200.320. Additionally, the small purchase “procedures” applicable to federal agencies, FAR Part 13, are contemplated in an entire section that is separate from the rules about the controlling SAT or other threshold. Finally, in other portions of the CFR—such as federal highway funds—the government has specifically instructed state entities to follow both the state or local “procedures” and the state or local “threshold. 23 CFR 172.7(a)(2). When the CFR wants the state government to follow state SATs, it will specifically do so. It has not put that instruction in 2 CFR 200.320. Guam law also specifically directs all persons within the Government of Guam to comply with the applicable federal law and regulations that are in conflict with or are not reflected in the Procurement Code. 5 GCA § 5501. In other words: Guam law requires GMHA to follow the federal rules. Specifically, here, the federal requirement that GMHA determine an appropriate SAT is not reflected in the local laws. GMHA, thus, must comply with the federal requirement that GMHA make a recipient-specific determination of an appropriate SAT. Even the Guam Legislature understands that the law operates in the same manner as the Attorney General’s memorandum. During a legislative hearing on June 25, 2024, Senator Sabina Perez recited the same analysis, recognizing that Guam agencies can use the federal simplified acquisition threshold when expending federal funds. See Guam Legislature, Public Hearing Bill No. 134-39 (COR) at *1:46:00-1:46:31 (June 25, 2025), available at https://www.youtube.com/live/ciXo1EEXJZI. In deciding the federal SAT applies, GMHA was also guided by precedent and guidance issued to other government entities. In 2015, when the Guam Department of Education was under a federal third-party fiduciary, it was still employing the lower local small purchase threshold. GDOE was instructed that this was inappropriate because federal law supersedes Guam law on the SAT. The federal fiduciary—consistent with USDOE instructions—required GDOE to follow the federal SAT. See Letter from John E. Hampford, Alvarez & Marsal, to Jon J.P. Fernandez, Superintendent of Guam Department of Education (Dec. 30, 2015); see also Letter from Jon J.P. Fernandez, Superintendent of Guam Department of Education to Attorney General Leevin T. Camacho and Public Auditor Benjamin J.F. Cruz (July 20, 2020). Thus, other Guam agencies have been instructed by the federal government to use the federal SAT. This is also bolstered by the case law. The Guam Supreme Court has ruled that the CARES Act funding was a federal appropriation for a specific purpose, “outside the control of the Guam Legislature.” See Story-Bernardo v. Gov’t of Guam, 2023 Guam 27 ¶ 46. ARPA funding is substantively similar to CARES Act funds, simply with additional permitted uses. Local law cannot dictate how these federal funds are spent. GMHA also considered case law from Texas federal court where a self-styled “whistleblower” sued the City of Burleson, Texas for allegedly spending in excess of their own SAT. Under Burleson’s own regulations, the local SAT was $10,000, see Rule 5.1, City Council Policy 36, City of Burleson Purchasing Policy (adopted July 2, 2018, revised Oct. 16, 2023). However, the lawsuit alleged that the city was spending in excess of this $10,000 SAT. The federal judge in that court stated: “In addition, the regulations show that “formal purchasing methods are not required” for purchases that are less than the “simplified acquisition threshold.” 2 C.F.R. § 200.1(2021). The simplified acquisition threshold is set at $250,000. 48 C.F.R. § 2.101(2021). However, Mr. Eder's complaint incorrectly alleges “upon information and belief” that the simplified acquisition threshold is $10,000. Doc. No. 37 at 12, ¶27(b). Mr. Eder's apparent misreading of the threshold for formal purchasing is central to his claim under the FCA, and it appears this concern may have arisen from simply misreading the rules, rather than any reasonable dispute under the law.” Eder v. City of Burleson, Civil No. 3:23-CV-00948-K, 2024 WL 4771408 at *5 (N.D. Tex., Nov. 13, 2024). Thus, the federal court recognized that the lower local SAT did not control. The only relevant SAT was the federal one. GMHA’s determination to use the maximum SAT allowed by the federal CFR is thus appropriate. The federal CFR rule requiring a recipient-specific SAT determination supersedes the local thresholds. If the procurement is under the federally-allowed $250,000 SAT, GMHA must still follow the local small purchase procedures. See in part 5 GCA § 5213. The auditors’ view of Guam law appears to be a clear outlier, inconsistent with a plain reading of both federal and Guam law, the opinions of both federal and local courts, the memorandum from the Attorney General’s Office, the understanding of the Guam Legislature, and the reasoned opinion of Hospital Legal Counsel. The auditors’ finding is also inconsistent with decades of GMHA procurement practice. The questioned costs based on this finding should be removed. The auditors’ (1) inability to even reference the relevant definitions from the CFR in effect at the time of the relevant audit period and (2) unwillingness to accept the legal opinions from licensed attorneys, should be a finding on the auditors’ peer review.

Views of Auditee and Planned Corrective Actions: Starting in April 2024, GMHA incorporated the Certificate Regarding Debarment, Suspension, Ineligibility, and Voluntary Exclusion for Covered Contracts and Grants in all of its Invitation for Bids and Request for Proposals. Proposed Completion Date: Completed. Name of Contact Person: Yukari Hechanova, Chief Financial Officer

Management agrees and will reimburse the employee for the amounts due for hours worked more than 40 hours in a work week during the fiscal year. Management will develop review procedures to respond to this finding.

Management agrees and will develop review procedures to respond to the findings.

Management agrees with the finding and will work with the City of San Antonio to correct the issue, and develop review procedures to respond to the finding.

Management agrees and will develop review procedures to respond to the findings.

Finding 2024-02 Failure to Follow Procurement Policy Condition: The Organization maintains a procurement policy that establishes spending thresholds and outlines the requirements for obtaining rate quotations at each of these levels. During audit procedures, it was noted that the Organization did not follow the policy’s requirements for obtaining and documenting rate quotations for two of the transactions reviewed. The Organization explained that the vendor was considered a unique partner, and competition was intentionally limited based on the specialized nature of the services provided. However, no documentation was retained to justify this decision to limit competition, as required by federal procurement standards. The absence of such documentation resulted in questioned costs for these transactions. Corrective Actions Taken or Planned: Prior to the award of ARPA grant funding in 2023, The Organization did not have a formal procurement policy in place. Implementation of such a policy was required to receive the award. At the time of implementation, however, partnerships had already been established and were identified in the original grant proposal. With respect to legal services, the Organization engaged the two primary organizations in Indianapolis that provide expungement assistance. Indiana Legal Services (“ILS”) was the first entity contacted, but after multiple attempts, no response was received from the designated point of contact. Subsequently, the Organization engaged another nonprofit organization, which responded promptly and agreed to serve as a partner under the grant. For grant compliance services, the Organization engaged a third party. This decision was based on recommendations from community partners, as well as her demonstrated work quality, professional reliability, and commitment to serving the target population. The Organization plans to execute the following: 1. Immediate Remediation - For the two transactions in question, the Organization will prepare and retain retroactive documentation outlining the rationale for limiting competition, citing the vendor’s unique qualifications and specialized services. This documentation will be added to the procurement files to ensure transparency and compliance. 2. Procurement Policy Enforcement - The Organization will reinforce its procurement policy with staff responsible for purchasing, emphasizing the following requirements: - Obtain and document at least three rate quotations when required. - When limiting competition, prepare a written justification memo explaining the rationale (e.g., sole source, specialized expertise, emergency procurement). - Retain all procurement documentation in a centralized file accessible for future audits. 3. Documentation Standardization - A Procurement Justification Form will be developed for instances where competition is intentionally limited. This form will include: + Vendor name and description of services + Reason competition is limited (sole source, unique expertise, etc.) + Approval signatures from both the requesting program lead and the Co-Executive Director - This form will be required for all procurements exceeding the competitive threshold where quotations are not obtained. 4. Staff Training - The Organization will provide refresher training to all staff involved in procurement to ensure they fully understand documentation requirements under both organizational policy and federal standards. - Training will specifically address scenarios involving sole source or unique vendor selections. 5. Oversight & Monitoring - All procurements exceeding $5,000 will require review and approval by the Board. - Quarterly internal audits will be performed by the Finance Manager to ensure procurement files include proper quotations or justification forms. The Board will receive quarterly procurement compliance reports from the Finance Manager. Any deviations will be documented and addressed immediately. Progress will be tracked as part of the Organization’s annual internal control review.

Personnel Responsible for Corrective Action: Dr. Shelley Kneuvean Chief Financial Officer Unified Government of Wyandotte County & Kansas City, Kansas Anticipated Completion Date: July 1, 2025 Views of Responsible Officials and Planned Corrective Action: Unfortunately, due to the late completion of the 2023 Single Audit and the hiring of the grants position in early 2025, many previous findings and contracts were not yet corrected in 2024. In the event of this finding, there were two vendors which had minimal expenditures in 2024 (under $5,000 which does not require competitive bids but in aggregate they exceeded that amount). The procurement department had not been consulted, and debarment checks were not completed when the work began in 2023, and final payments were issued in 2024. In the Grants Manual and training departments have been instructed that these procedures must be complied with for all grants.

Condition Found: The Organization did not make the required annual deposits into the debt payment reserve, capital asset replacement reserve, resident asset depletion reserve, and the facility fill reserve. We confirmed the balances of the four reserve accounts and identified that all four reserve accounts were not funded in accordance with the USDA loan agreement. Individual(s) Responsible for Corrective Action: Lynda P. Goldthwaite, Executive Director and Stacey Matott, Director of Finance Planned Corrective Action: Peabody Place sought a debt work out in 2025 that would allow for deferral of required deposits for six months until January 1, 2026. Anticipated Completion Date: Completed

Strengthen compliance efforts and mitigate risk, staff will consult a qualified third-party professional before executing any transaction that may be unallowable, ensuring adherence to funding. If unallowable expenses are identified, staff will quickly coordinate with the appropriate state agency to resolve issue.

FA 2024-001 Strengthen Controls over Expenditures Compliance Requirement: Procurement and Suspension and Debarment Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Agriculture Pass-Through Entity: Georgia Department of Education Assistance Listing Number and Title: 10.553 - School Breakfast Program 10.555 - National School Lunch Program Federal Award Number: 225GA324N1099 (Year: 2024), 245GA324N1199 (Year: 2024) Questioned Costs: $46,878 Description: A review of expenditures charged to the Child Nutrition Cluster revealed that the School District's internal control procedures were not operating appropriately to ensure that the School District's procurement procedures were followed. Corrective Action Plans: Responsible Parties: Superintendent, School Nutrition Manager, To address this finding and prevent recurrence, the Superintendent and School Nutrition Manager will implement the following corrective measures in accordance with Terrell County Board of Education policy and applicable federal/state guidelines: 1. Staff Training-Provide training for School Nutrition staff on federal procurement requirements, the district's Procurement Plan, and Board policy related to financial management, procurement, and record retention. Training will be documented and updated annually or as requirements or Board policies are revised. 2. Process Monitoring-Establish written procedures aligned with board-approved procurement policies to ensure all required bids and quotes are obtained, documented, and retained. Maintain both electronic and hard-copy procurement files, with oversight responsibilities clearly assigned. 3. Internal Compliance Reviews-Conduct quarterly internal reviews between the Schol Nutrition Department and Finance to verify procurement documentation and adherence to Board policy and the Procurement Plan. Provide review summaries to the Superintendent and report systemic issues to the Board, if necessary. 4. Accountability Measures-Incorporate procurement documentation and retain responsibilities into departmental expectations, evaluations, and supervisory reviews, consistent with Board policies on accountability and internal controls. Noncompliance with documentation procedures will be addressed under established Board personnel and accountability policies. Estimated Completion Date: June 30, 2026 Contact Person: Shereca R. Harvey, Superintendent Telephone: (229) 995-4425 Email: srharvey@terrell.k12.ga.us

Client Response - During FY 2024 and part of FY 2025, the organization experienced front desk personnel turnover and operational disruptions due to facility remodeling, which required multiple relocations of staff and records. These factors contributed to gaps in the availability of supporting documentation needed to validate certain patient billing amounts. Management acknowledges the importance of retaining complete and accurate documentation to support billing, particularly for services subject to the sliding fee scale. While only a portion of the tested items were impacted, we recognize that missing documentation created the appearance of errors that could not be recalculated during audit testing. To address this, the organization is implementing corrective measures, including: • Strengthening record retention procedures to ensure all supporting documentation for billing and sliding fee scale adjustments is readily available for review. • Enhancing training for staff on billing documentation requirements tied to federal program compliance. • Establishing periodic internal reviews to confirm that billing aligns with program rules and is fully supported.

The Town of Jonesboro acknowledges the audit finding and appreciates the opportunity to provide clarification regarding the cited payment of $85,476 to a contractor for water and sewer system repairs. This particular contractor had a long-standing relationship with the previous administration and continued to submit invoices for services claimed to have been performed under prior authorizations. Upon assuming office, the current administration encountered a backlog of such invoices and, in many cases, limited to no documentation supporting the scope, schedule, or verification of the work that was allegedly completed. Due to the lack of transparency, inconsistent billing, and insufficient oversight, the current administration determined that it was not in the best financial or operational interest of the Town to continue any further engagement with this contractor. It became clear that the pattern of invoicing presented a risk of noncompliance and potentially unsupported expenditures. As a corrective measure, the Town took the following actions: 1. Final Settlement and Termination of Relationship: The Town made a one-time payment to settle the outstanding invoice history. This was done to clear any disputed or lingering financial obligations associated with the contractor’s services under the previous administration. 2. Legal Closure with Notarized Certification: The Town required and obtained a notarized letter from the contractor affirming that no additional payments are owed and that all contractual or informal claims have been resolved in full. This was done to ensure finality and mitigate any future risk or liability. 115 3. Policy Reaffirmation: The Town affirms its commitment to federal procurement regulations, specifically those set forth under 2 CFR § 200.320. Current procedures now mandate that all purchases exceeding the micro-purchase threshold undergo proper procurement documentation, including solicitation of price or rate quotations from multiple qualified vendors. Moving forward, the Town has ensured all vendors and contractors are engaged under transparent, documented, and compliant procurement procedures. This administration remains dedicated to restoring public trust and operating under full compliance with federal, state, and local purchasing regulations.