Corrective Action Plans

Finding Number 2023-209 Subject Heading (Financial) or AL no. and program name (Federal) 93.323: Epidemiology and Laboratory Capacity for Infectious Diseases Planned Corrective Action The flagged contract and incorporated section were negotiated by OSDH's prior leadership at that time (May- June 2021). After a leadership change in October 2021, Commissioner Reed promptly terminated the contract - well before any such flagged services were engaged in or provided by the contractor. To OSDH's knowledge, it did not pay for any such services. Current OSDH leadership and Legal work diligently during the contract review process to ensure that unallowable activities are not included in vendor contracts. Anticipated Completion Date 6/30/24 Responsible Contact Person Stefan Von Dollen, Interim CFO

Finding Number 2023-207 Subject Heading (Financial) or AL no. and program name (Federal) 93.323: Epidemiology and Laboratory Capacity for Infectious Diseases Planned Corrective Action The overstatement of expenditures on the SEFA is due to incorrect amounts being included on the report due to using incorrect PeopleSoft queries and a lack of proper staff training. As stated in the finding, transactions related to expenditures and draws on the grant are reported in incorrect accounting periods; this is due to general ledger entries not using a budget reference code causing an under/over statement of expenditures and revenues. To mitigate this issue going forward, management has established a cash report in Hyperion which is currently being used by the Accounting area to ensure grant draws are accurate. To ensure transactions are recorded in the correct accounting period, management is working to create a policy and procedure to ensure a budget reference code is used on all general ledger transactions. The budget reference code will also be added to the Hyperion cash report to ensure transactions are reported in the proper accounting period. Management is also actively seeking formal training opportunities for accounting staff related to the proper procedures for completing all ACFR schedules. Anticipated Completion Date 6/30/24 Responsible Contact Person Stefan Von Dollen, Interim CFO

Finding Number 2023-208 Subject Heading (Financial) or AL no. and program name (Federal) 93.268: Immunizations Cooperative Agreements Planned Corrective Action The flagged contract and incorporated section were negotiated by OSDH's prior leadership at that time (May- June 2021). After a leadership change in October 2021, Commissioner Reed promptly terminated the contract - well before any such flagged services were engaged in or provided by the contractor. To OSDH's knowledge, it did not pay for any such services. Current OSDH leadership and Legal work diligently during the contract review process to ensure that unallowable activities are not included in vendor contracts. Anticipated Completion Date 6/30/24 Responsible Contact Person Stefan Von Dollen, Interim CFO

Finding Number 2023-061 Subject Heading (Financial) or AL no. and program name (Federal) AL #84.425 – EDUCATION STABILIZATION FUND (ESF - AL #84.425U) Planned Corrective Action The Office of Title Services will continue to provide additional training to all reviewers to strengthen the claims review process. Anticipated Completion Date August-2025 Responsible Contact Person Tammy Smith

Finding Number 2023-046 Subject Heading (Financial) or AL no. and program name (Federal) AL #84.425 – EDUCATION STABILIZATION FUND (ESF - AL #84.425D; 84.425R; 84.425V) Planned Corrective Action OSDE does not agree with the finding regarding $802,414.82 of claims for a non-public school that used unallowable proportionality data in their ARP EANS application. The Office of Title Services (OTS) used the limited federal guidance available at the time to manage the Emergency Assistance to Nonpublic Schools (EANS) funds. Due to limited guidance from the US Department of Education (USDE), OSDE allocated ARP EANS funding consistent with CRRSA EANS. After funds were allocated, USDE provided guidance on the allocation of ARP EANS funding using actual low income poverty data. As a result, OSDE’s reviewed the allocation of ARP EANS funding and determine that certain expenditures totaling $802,414 were ineligible under ARP EANS but eligible under CRSA EANS. In the fall of 2024, the Office of Title Services (OTS) provided documentation and adjusting journal entries to reallocate ineligible funds from ARP EANS to unspent CRSA EANS. This adjustment transferred the unallowable expenditures originally charged to ARP EANS to unspent funds under CRRSA EANS. All funds were obligated during the applicable period of availability. The United States Department of Education accepted evidence of this corrective action in an email received by OTS staff on February 5, 2025. A copy of this email was sent to the Oklahoma State Auditor and Inspector’s Office on Monday, May 19th, 2025. As a result, these expenditures were allowable and did not result in questioned costs. OSDE agrees with that low-income data used for EANS allocation was different than the low-income data used for Title I allocations. OSDE used Low-income counts based upon data provided by nonpublic schools. The Office of Title Services (OTS) used the limited federal guidance available at the time to manage the Emergency Assistance to Nonpublic Schools (EANS) funds. OSDE is not aware of expenditures that lacked supporting documentation. OSDE agrees with the finding on a duplicate Payment. Duplicate payments were erroneously made to Complete Book and Media Supply LLC. OSDE is working to resolve this matter. EANS Proportionality In the fall of 2024, the Office of Title Services (OTS) provided documentation and adjusting journal entries to re-allocate ineligible funds from ARP EANS to unspent CRSA EANS. This adjustment transferred the unallowable expenditures originally charged to ARP EANS to unspent funds under CRRSA EANS. All funds were obligated during the applicable period of availability. The United States Department of Education accepted evidence of this corrective action in an email received by OTS staff on February 5, 2025. A copy of this email was sent to the Oklahoma State Auditor and Inspector’s Office on Monday, May 19th, 2025. As a result, these expenditures were allowable and did not result in questioned costs. EANS Low-Income If low-income data for nonpublic school participants is necessary to determine eligibility, then OTS will create a written procedure to collect and verify the data. EANS Procurement To avoid duplicate payments only the Senior Director of Federal Programs will have approval on any invoice submitted for payment. Invoices will be tracked and documented by the Office of Title Services. In the future should it be necessary to allocate to non-LEA entities, the Office of Title Services will create written procedures to ensure any necessary supporting documentation be submitted prior to approving payment on an invoice. Anticipated Completion Date Responsible Contact Person Tammy Smith

Finding Number 2023-102 Subject Heading (Financial) or AL no. and program name (Federal) ALN: 21.027 Federal Program name: Coronavirus State And Local Fiscal Recovery Funds (CSLFRF) Planned Corrective Action Management Response The Oklahoma Office of Management and Enterprise Services – Grants Management Office (OMES-GMO), in coordination with the Oklahoma State Department of Health (OSDH), acknowledges the importance of maintaining effective internal controls and complying with federal record retention requirements, as outlined in 2 CFR § 200.303 and 2 CFR § 200.334. OMES-GMO and OSDH concur that improvements to the earlier implemented processes would have served to strengthen protocols designed to garner greater assurances for reimbursed expenditures. In the case identified, ongoing partnership with OMES-GMO resulted in OSDH proactively initiating an internal review, identifying the ineligible expenditures, and taking corrective steps to partially offset the unallowable amount. Subsequently, OSDH Finance has enhanced its internal reimbursement review procedures. As of 2023, all invoices and supporting documentation submitted by subrecipients are subject to a dual-layered review and approval by both OSDH Finance and OMES-GMO prior to reimbursement. This advancement in oversight provides additional controls to reasonably assure that agency expenditures are consistent with approved project scopes, allowable under federal cost principles, and fully documented. Additionally, current staff have received targeted training, and OSDH has implemented a formal onboarding process to ensure that all new staff are trained in federal grant compliance, documentation standards, and internal control requirements. Corrective Actions • Strengthened Review and Approval Process: All subrecipient reimbursements are now reviewed and approved in layers by both OSDH Finance and OMES-GMO staff and leadership prior to payment. This ensures supporting documentation is complete, expenditures are allowable, and spending aligns with the terms of the award. • Ongoing Staff Training and Onboarding: All existing staff participate in continued training on federal cost principles, subrecipient monitoring, and documentation standards. A structured onboarding program is now in place to ensure consistent compliance knowledge across all new hires. • Monitoring and Recoupment Protocols: Post-award monitoring procedures have been updated to support early detection of ineligible expenditures. OSDH will ensure prompt recoupment or reallocation actions are taken, when necessary, in accordance with federal guidelines. These corrective actions demonstrate OMESGMO’s and OSDH’s ongoing commitment to effective stewardship of federal funds, compliance with grant regulations, and continuous improvement of internal controls. Anticipated Completion Date 5/1/2025 Responsible Contact Person OMES: Parker Wise OSDH: Diane Brown, Danielle Smith, Tracey Douglas

Finding Number 2023-101 Subject Heading (Financial) or AL no. and program name (Federal) ALN: 21.027 Federal Program name: Coronavirus State And Local Fiscal Recovery Funds (CSLFRF) Planned Corrective Action The Oklahoma Office of Management and Enterprise Services – Grants Management Office (OMES-GMO) respectfully disagrees with this finding, specifically with the criteria from the Code of Federal Regulation utilized as the sole foundation for this finding, 2 CFR §200.303. This regulation states, in part that, “The Non-Federal entity must; (a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” (emphasis added). For further clarity as to the standard for reasonableness, clarity can be found in 2 CFR § 200.1 Questioned cost, that states in part: Questioned cost means a cost that is questioned by the auditor because of an audit finding: … (4) where the costs incurred appear unreasonable and do not reflect the actions a prudent person would take in the circumstances. Findings bolstered by the reasonable prudent person standard in 2 CFR §200.303 must not rest on a perfect person standard, nor rest on an experienced auditor standard, but based on the care applied by the ordinary prudent person acting reasonably under the circumstances at the time of their review. From this perspective, the efforts of participants to obtain reasonable assurances included meetings, correspondence, and the gathering of documentation in support of work in furtherance of the program. If the determinations based on the documentation provided at the time satisfy reasonableness upon review, then subsequent documentation will not sustain the finding based on the criteria cited in 2 CFR §200.303. At the outset of the program, DHS was assessed as a low risk subrecipient in part due to its extensive experience with federal awards. Supporting documentation produced by the agency during the period associated with the finding reflected the breakout of the vendor’s hours and rate for the projects. Sustained communication and correspondence between the agencies and the vendor contributed to providing additional assurances that the work was consistent with the documentation in support. Agency-Specific Responses: The identified agency, DHS, provided the following independent response: OKDHS has the backup for each invoice submitted by its contractor, JGC, and reviews the invoices as the hours are reflected in the backup. OKDHS and the supplier keep detailed records and support for all activities related to CSLFRF. The Oklahoma legislation, HB 2884, effective 3/28/2023, appropriates $65 million from ARPA pandemic relief funds to OKDHS for use on 9 projects as approved by the Joint Committee on Pandemic Relief Funds. Without separating administrative costs per project, Section 13 of the bill provides that OKDHS may retain 2% of the funds appropriated in the bill for costs associated with administering the projects in the bill as a whole, "provided that no funds shall be retained that would be disallowable under the provisions of the American Rescue Plan Act of 2021". The total administrative allowance to implement HB2884 equates to $1,304,847.00. The American Rescue Plan Act of 2021 grant guidance for administrative fees at or lower than the accepted de minimis rate (10%) "does not require documentation to justify its use." Anticipated Completion Date N/A Responsible Contact Person OMES: Parker Wise DHS: Jaretta Murphy, Lindsey Kanaly, Danielle Durkee, Katey Campbell

Finding Number 2023-005 Subject Heading (Financial) or AL no. and program name (Federal) ALN: 21.027 Federal Program name: Coronavirus State And Local Fiscal Recovery Funds (CSLFRF) Planned Corrective Action Management Response: OMES-GMO concurs with the finding that CSLFRF program funds were applied to GEER and ERA expenses. OMES-GMO specifically notes that while the applied expenditures are indeed allowable under federal programs, the application of CSLFRF to these programs was in error ostensibly due to administrative challenges experienced throughout this tumultuous period. During the COVID-19 pandemic, states across the country faced numerous operational and compliance challenges, including frequently changing federal guidance and firsttime handling of federal funds. In response to the growing complexity of managing multiple federal funding programs, OMES established the Grants Management Office (OMESGMO). However, in its initial phase, the OMES-GMO experienced consistent instability with a high frequency of employee turnover, understaffing, limited resources, restricted internal controls, and practiced leadership. These factors contributed to classification errors and delays with internal review. Since then, OMES-GMO has taken steps to stabilize operations by maintaining consistent leadership, hiring additional staff, and the uniform application of organizational processes. These improvements have strengthened internal controls and allowed for the identification of previously misapplied expenditures. Prior to the finding, OMES-GMO reviewed and flagged these expenditures and is actively working to correct the issue. To resolve the misclassification, OMES has requested state appropriations to properly adjust and reallocate these expenses to their appropriate funding sources. Anticipated Completion Date Controls have been put into place and will continue through the end of the Federal Period of Performance and closeout. Responsible Contact Person Parker Wise

Finding Number 2023-091 Subject Heading (Financial) or AL no. and program name (Federal) ALN: 21.019 Federal Program name: Emergency Rental Assistance Program (ERA) Planned Corrective Action 1. Condition and Context: While documenting controls over Period of Performance for the ERA 1 grant, we noted payments made to subrecipients in the Statewide Accounting System were all put under one fund and were not distinguishable between ERA 1 and ERA 2. Therefore, OMES was unable to determine at a glance whether the funds distributed to subrecipients were attributable to ERA 1 or ERA 2. Further, we determined one of the subrecipients, Communities Foundation of Oklahoma (CFO), did not have sufficient internal controls over ERA 1 program spending to ensure all funds were expended by the end of the period of performance. • We disagree with SAI on the Statewide Accounting System separation of funds. The Statewide Accounting System did distinguish between ERA1 and ERA2. The Statewide Accounting System has funds 49400 and 49200 shows establishment of both federal funds in 2021. • We disagree with SAI on CFO’s internal controls. CFO did have internal controls in place to ensure funds were expended during the period of performance. Per ERA 1 Closeout Resource “The end date of the award period of performance is the last day for a grantee to obligate funds for ERA1 activities (September 30, 2022, for award funds received pursuant to the grantee’s initial allocation and December 29, 2022, for reallocated funds). Per documentation provided by SAI the general ledger shows a date before December 29, 2022. (Attachment 494,492, ERA Closeout Resource) 2. For eight of 30, or 26.67% of adjustments tested, the adjustment was to move expenses from ERA 2 to ERA 1 to meet ERA 1 spending requirements prior to closeout of the program. CFO comingled ERA 1 and ERA 2 funds and could not directly support each recharacterization with documentation for the specific transactions involved, but stated it was recharacterized to meet ERA 1 spending limits prior to the end of the period. In addition, CFO did not go back to revise any prior monthly or quarterly reports as required by Treasury. • We partially agree. We agree that funds cannot be moved from ERA 2 to ERA 1. • We disagree with SAI on comingling of funds. CFO did not comingle funds. CFO has 31 separate accounts within C-Suite their financial software. All accounts are listed and examples provided in the ERA Fund Open Report. • We disagree with SAI’s evaluation of the Treasury reporting requirement. CFO was not required to go back and revise prior monthly and quarterly reports per federal guidance. “As of December 2022, ERA1 grantees will only be able to edit their Final Report or as applicable, their Q4 2022 report. However, grantees may submit revisions to certain financial data submitted with their past quarterly reports, specifically, subrecipient/contractor/direct payee records; subaward/contract/direct payment records; and expenditure records when completing their Final Report or as applicable, their Q4 2022 Report. “While ERA1 grantees are no longer able to submit or revise any prior ERA1 quarterly reports, grantees may receive additional communications from Treasury’s compliance team to make corrections to past quarterly reports and as appropriate, the Final Report…” (Attachment ERA Closeout Resource pg 5) 3. For 11 of 30, or 36.67%, the adjustment was to move expenses between jurisdictions (City, State, County), which is unallowable per FAQ #42 and ERA reporting guidance. • We disagree with SAI’s unallowable cost. Due to a misunderstanding, CFO staff misstated that funds were moved between jurisdictions. Funds were not moved between jurisdictions. If a computer error occurred due to the large volume of checks that were being sent every week (approximately 1,600), not all errors were caught immediately. However, when further reviews were conducted and it was discovered a payment was issued incorrectly, the proper accounting procedures for correcting the errors were completed. (Attachment OneDrive_2025- 4-23(1)) • We disagree. FAQ 42 says nothing about jurisdictions. FAQ #42 states, “May a grantee provide ERA funds to another entity for the purpose of making payments more rapidly? To speed the delivery of assistance, grantees may enter into a written agreement with a nonprofit organization to establish a payment fund for the sole purpose of delivering assistance using ERA funds while a household’s application remains in process. A grantee may use such a process if: The process is reserved for situations in which an expedited payment could reasonably be viewed as necessary to prevent an eviction or loss of utility services that precludes employing the grantee’s standard application and payment procedures on a timely basis. The nonprofit organization has the requisite financial capacity to manage the ERA funds, such as being a certified community development financial institution. The nonprofit organization deposits and maintains the ERA funds in a separate account that is not commingled with other funds. The grantee receives all required application and eligibility documentation within six months. The nonprofit organization agrees in writing to return to the grantee any assistance that the household was ineligible for or for which the required documentation is not received within six months. Any funds not used by the nonprofit organization are ultimately returned to the grantee. If a payment made by the nonprofit organization is subsequently found to have been used for an ineligible household or an ineligible expense, or if the required application and eligibility documentation are not timely submitted, the payment will be considered an ineligible use of ERA funds by the grantee. Any administrative expenses attributable to a payment fund should be considered in accordance with FAQ 29.” (Attachment ERA FAQs) 4. When performing our testwork to determine whether ERA 1 expenditures met period of performance requirements (incurred on or before September 30, 2022), we noted 207 transactions occurred after September 30, 2022. Of the 207 transactions, we noted 40 that resulted in $10,711,668 (of this amount $2,313,435 is already questioned above) in questioned costs. • We disagree with SAI’s questioning of expenditures incurred after September 30, 2022. Per the ERA 1 Closeout Resource, “The end date of the award period of performance is the last day for a grantee to obligate funds for ERA1 activities (September 30, 2022, for award funds received pursuant to the grantee’s initial allocation and December 29, 2022, for reallocated funds). Per documentation provided by SAI, the general ledger shows a date before December 29, 2022. (Attachment ERA Closeout Resource pgs 1, 4) 5. For 13 of 207, or 6.28% of transactions tested, the adjustment was to move funds between funding jurisdictions (City, State, County), which is unallowable per FAQ #42 and ERA reporting guidance. (This resulted in $1,594,881 in questioned costs, of which $24,450 is questioned above) • We disagree with SAI’s questioned cost. Due to a misunderstanding CFO staff misstated that funds were moved between jurisdictions. Funds were not moved between jurisdictions. If a computer error occurred due to the large volume of checks that were being sent every week (approximately 1,600), not all errors were caught immediately. However, when further reviews were conducted and it was discovered a payment was issued incorrectly, the proper accounting procedures for correcting the errors were completed. (Attachment OneDrive_2025- 4-23(1)) • We disagree. FAQ #42 says nothing about jurisdictions. FAQ #42 states “May a grantee provide ERA funds to another entity for the purpose of making payments more rapidly? To speed the delivery of assistance, grantees may enter into a written agreement with a nonprofit organization to establish a payment fund for the sole purpose of delivering assistance using ERA funds while a household’s application remains in process. A grantee may use such a process if: The process is reserved for situations in which an expedited payment could reasonably be viewed as necessary to prevent an eviction or loss of utility services that precludes employing the grantee’s standard application and payment procedures on a timely basis. The nonprofit organization has the requisite financial capacity to manage the ERA funds, such as being a certified community development financial institution. The nonprofit organization deposits and maintains the ERA funds in a separate account that is not commingled with other funds. The grantee receives all required application and eligibility documentation within six months. The nonprofit organization agrees in writing to return to the grantee any assistance that the household was ineligible for or for which the required documentation is not received within six months. Any funds not used by the nonprofit organization are ultimately returned to the grantee. If a payment made by the nonprofit organization is subsequently found to have been used for an ineligible household or an ineligible expense, or if the required application and eligibility documentation are not timely submitted, the payment will be considered an ineligible use of ERA funds by the grantee. Any administrative expenses attributable to a payment fund should be considered in accordance with FAQ 29.” (Attachment ERA FAQs) 6. For 11 of 207, or 5.31%, the adjustment was to move funds between ERA 2 and ERA 1 and the adjustment was not directly supported with documentation for the specific transactions involved. It was noted as recharacterized to meet ERA 1 spending limits prior to the end of the period, and CFO did not go back to revise any prior monthly or quarterly reports as required by Treasury. (This resulted in $7,003,715 in questioned costs, of which $2,200,000 is questioned above) • Partially agree. • We agree that funds cannot be moved from ERA2 to ERA1 • We disagree with SAI’s evaluation of the Treasury reporting requirement. CFO was not required to go back and revise prior monthly and quarterly reports per federal guidance. “As of December 2022, ERA1 grantees will only be able to edit their Final Report or as applicable, their Q4 2022 report. However, grantees may submit revisions to certain financial data submitted with their past quarterly reports, specifically, subrecipient/contractor/direct payee records; subaward/contract/direct payment records; and expenditure records when completing their Final Report or as applicable, their Q4 2022 Report. “While ERA1 grantees are no longer able to submit or revise any prior ERA1 quarterly reports, grantees may receive additional communications from Treasury’s compliance team to make corrections to past quarterly reports and as appropriate, the Final Report…” (Attachment ERA Closeout Resource pg 5) 7. For 7 of 207, or 3.38% of transactions tested, the adjustment was to ‘correct accounts’ or ‘tie out accounts’; we determined these were not attributable to specific transactions but were ‘plug’ numbers to zero out the ERA 1 balance prior to the end of the period of performance to meet spend down requirements and were not supported by actual expenditures that can be determined to have been incurred on or before September 30, 2022. (This resulted in $1,837,072 in questioned costs, of which $88,985 is questioned above) • We partially agree. • We agree that funds cannot be moved from ERA 1 to ERA 2 • We disagree with SAI’s questioning of expenditures incurred after September 30, 2022. Per the ERA 1 Closeout Resource, “The end date of the award period of performance is the last day for a grantee to obligate funds for ERA1 activities (September 30, 2022, for award funds received pursuant to the grantee’s initial allocation and December 29, 2022, for reallocated funds). Per documentation provided by SAI, the general ledger shows a date before December 29, 2022. (Attachment ERA Closeout Resource pgs 1, 4) 8. For 7 of 207, or 3.38% of transactions tested, the adjustment was to CFO management fees. Management fees were retained on a percentage basis; therefore, the fee is not supported by actual expenditures that can be determined to have been incurred on or before September 30, 2022. (This resulted in $1,430,228 in questioned costs which were all questioned on finding 2023-028). We disagree with SAI’s questioning of expenditures incurred after September 30, 2022. Per the ERA 1 Closeout Resource, “The end date of the award period of performance is the last day for a grantee to obligate funds for ERA1 activities (September 30, 2022, for award funds received pursuant to the grantee’s initial allocation and December 29, 2022, for reallocated funds). Per documentation provided by SAI, the general ledger shows a date before December 29, 2022. (Attachment ERA Closeout Resource pgs 1, 9. We noted a total of $8,271,796 in management fees that were not expended for ERA 1 and therefore were not spent within the period of performance. Of this amount, $6,841,568 were management fees questioned in the SFY2021 and SFY2022 State of Oklahoma Single Audit reports and the remaining $1,430,228 is questioned on finding 2023-028. We disagree with SAI’s questioning of expenditures incurred after September 30, 2022. Per the ERA 1 Closeout Resource, “The end date of the award period of performance is the last day for a grantee to obligate funds for ERA1 activities (September 30, 2022, for award funds received pursuant to the grantee’s initial allocation and December 29, 2022, for reallocated funds). Per documentation provided by SAI, the general ledger shows a date before December 29, 2022. (Attachment ERA Closeout Resource pgs 1, 4) 10. For 2 of 207, or 0.97% of transactions tested, the payment was not supported by an itemized invoice to enable a determination that all the costs were incurred prior to September 30, 2022. (This resulted in $276,000 in questioned costs) • We disagree with SAI questioning cost and have provided supporting documentation in OneDrive - 2025-04-23(2) to show questioned expenditures. • We disagree with SAI’s questioning of expenditures incurred after September 30, 2022. Per the ERA 1 Closeout Resource, “The end date of the award period of performance is the last day for a grantee to obligate funds for ERA1 activities (September 30, 2022, for award funds received pursuant to the grantee’s initial allocation and December 29, 2022, for reallocated funds). Per documentation provided by SAI, the general ledger shows a date before December 29, 2022. (Attachment OneDrive -2025-04-23(2), ERA Closeout Resource pgs 1, 4 ) Oklahoma Office of Management and Enterprise Services (OMES) acknowledges the Oklahoma State Auditor and Inspector Office’s (SAI) findings that OMES did not implement the proper internal controls and oversight of the ERA Program during FY2023. However, OMES has taken steps to correct these findings and follow the recommendations set forth by SAI. Beginning with FY2025, OMES has taken the following measures: • Oversight and management of the ERA program has been transferred to the OMES Grant Management Office (OMES-GMO) which has staff with several years of grant experience. OMES-GMO has recently hired additional staff, and the two staff members dedicated to the management of the ERA program have 20+ years of combined federal grant specific experience. To ensure that the subrecipient agreement includes all the required terms under the ERA Program and that the agreement does not expire, OMES-GMO and the Communities of Foundation of Oklahoma (CFO) have recently executed a Subrecipient Grant Agreement Amendment that details the responsibilities of OMES to monitor CFO and the duties and processes that CFO must follow in regard to ERA Program, including detailed cash management policies. See Attached – Grant Agreement Amendment. • OMES-GMO required the return of the remaining ERA2 Program funds from CFO to ensure proper oversight and review of ERA expenditures is performed. • OMES-GMO has a multi-level system of internal controls for grant management and oversight that includes routine monitoring, desk review, and site visits for all projects and associated project/administrative expenditures to ensure allowability, accuracy, and assist in the detection of fraud. For example, OMES-GMO’s process for disbursing funds to a subrecipient requires a written request from the subrecipient with supporting documentation, then OMES-GMO assigns a staff lead and secondary grant analyst to perform a primary and secondary review for compliance and to require additional supporting documentation if needed to approve the request. Once those reviews are completed and approved by the OMES-GMO staff, the Director of the OMES-GMO must approve the request before it is sent to the OMES Finance Division, who will then verify the calculated amount(s) before completing the disbursement to the subrecipient. These internal controls and policies have been implemented for the management and oversight of the ERA Program and provide a multilayer review that will prevent fraud and risk factors applicable to the ERA program. Additionally, the OMES-GMO staff assigned to the ERA program have the training and knowledge to ensure compliance with the Federal grant requirements. • Depending on the level of risk, OMES-GMO conducts monthly, bi-weekly or weekly meetings with each subrecipient to monitor the progress of projects and address any issues or changes that might impact the project. For the ERA Program, OMES-GMO conducts bi-weekly monitoring meetings with CFO and is currently reviewing documentation provided by CFO to ensure all current ERA projects are eligible under the ERA guidelines and that CFO is exercising the proper oversight over their subrecipients. • OMES-GMO will continue with their current ERA monitoring steps and internal controls and will work with CFO to ensure ERA program funds are spent in accordance with ERA program guidelines and state and federal regulations. Anticipated Completion Date Ongoing throughout the life of the grant Responsible Contact Person Brandy Manek

Finding Number 2023-090 Subject Heading (Financial) or AL no. and program name (Federal) ALN: 21.019 Federal Program name: Emergency Rental Assistance Program (ERA) Planned Corrective Action • Condition and Context: While documenting controls over housing stability expenditures for the ERA 1 and ERA 2 programs, we noted one expenditure for payroll costs to an organization contracting with one of the subrecipients that provides employment and career resources, which is not an allowable housing stability activity. • We disagree employment and careers are an essential in creating housing stability. The 2024- ERA Compliance Supplement Section A. Activities Allowed or Unallowed; 1. Activities Allowed (c) states in part “Housing Stability Services: Under ERA 1, housing stability services includes case management and other services related to the COVID-19 outbreak intended to help keep households stably housed. Under ERA 2, housing stability services do not have to be related to the COVID-19 outbreak. For ERA 1 and ERA 2, housing stability services include those that enable households to maintain or obtain housing. Such services may include, among other things, eviction prevention and eviction diversion programs.” It is apparent from the guidance and division of funds for a portion to be used for housing stability, the Treasury is supporting measures to first keep vulnerable individuals and families housed during the emergency, but secondly, provide services that will assist them for the future. Program guidance from the Treasury (Building Housing Stability Infrastructure | U.S. Department of the Treasury) encourages the integration of wrap-around services, stating these services “can be particularly important for tenants who have more than a temporary hardship related to the pandemic and for whom financial assistance covering rental arrears is not enough ‘to catch up’ over the long term. Having a network of support services can help households move out of a cycle of housing instability and into a pathway of financial stability.” The Treasury goes on to provide examples of those who may be served by this practice include eligible households which include those that need additional support and coaching to develop a reliable self-sufficiency plan for maintaining housing. The Treasury stresses that by implementing these services, a long-term infrastructure is built that can help break the cycle of housing instability and support a holistic community recovery.” Treasury concludes with their support of preventative programs, stating “An infrastructure of housing stability services can ensure that support for the most vulnerable will be available. Financial assistance is not the only priority, and services can be primarily focused on coaching and educating vulnerable households. When rental assistance is scarce, support services can still play a role in preventing eviction and homelessness.” (Attachment HAP 2-SidexSide program tie to housing stability) • For 6 of 15, or 40%, of items tested, the payment allowable activities/costs such as sick pay, moving offices, ices, non-ERA training, and general admin activities not RA. This resulted in $21,442.50 in questioned costs. • We agree with the finding. CFO has strengthened internal controls and understanding to identify appropriate expenses more accurately to invoice against the LASO contract. • For 2 of 15, or 13.33%, of items tested, the invoices paid between March 2023 and June 2023, included unallowable activities/costs such as management fees and moving/storing furniture. Further, there was not a valid contract in place at the time the expense was incurred or paid. The contract ended 2/28/2023 and was not renewed or modified until 7/11/2023. This resulted in $17,648.56 in questioned costs. • We disagree with this finding. The expenses associated with the payment in question were for scaling the organization to a point where it could accommodate a larger number of clientele and more effectively serve clients. It was essential to SidexSide’s ERA program that they had enough furniture in their offices to support a full cohort of clients coming on to the program. This allowed SidexSide the ability to fully execute their program. The contract in question has a one-year option to renew. The independent contractors continued to work under the same terms and conditions and continued to be paid the same remuneration in the time period between the expiration of the original contracts and the signing of the new contracts and/or addendums. According to 15 O.S. Section 133, an implied contract is one where the existence and terms are not explicitly stated but are inferred from the conduct of the parties. Because the original contracts contained the specific terms regarding services and payment and because these independent contractors continued to operate under those same terms and receive payment even in the interim between signed contracts, this shows that an implied contract existed under Oklahoma law. (Attachment ERA2 HSP Last Mile Contract) • For 1 of 15, or 6.67%, of items tested, the payment was for unallowable activities/costs such as supplies and equipment to establish the organization that did not directly go to providing housing stability services. This resulted in $75,000 in questioned costs. • We disagree, the expenses associated with the $75,000 payment in question were not for establishing the organization but for scaling the organization to a point where it could accommodate a larger number of clientele and more effectively serve their clients. ALN was established as a Not For-Profit Corporation on March 29, 2022, filing number 2113093942, and began assisting refugees in April 2022 (documented in the Oklahoma Watch article). ALN was a fully operating organization by the time the ERA grant was received, and the expenses shown associated with the grant was essential to increase the capacity of ALN to serve their clients but the expenses were not to create the organization itself. Attachments https://oklahomawatch.org/2022/05/05/protected-for-nowthe- race-to-provide-afghan-evacuees-with-legal-services/ https://www.sos.ok.gov/corp/charityInquiryFind.aspx • For 1 of 15, or 6.67%, of items tested totaling $1,575, the payment included unallowable activities/costs that were refunded using private funds on 7/18/2023, after the SFY23 but prior to SAI's audit. Since the amounts were refunded, SAI did not question these costs. • We agree money was refunded before completion of the audit. Oklahoma Office of Management and Enterprise Services (OMES) acknowledges the Oklahoma State Auditor and Inspector Office’s (SAI) findings that OMES did not implement the proper internal controls and oversight of the ERA Program during FY2023. However, OMES has taken steps to correct these findings and follow the recommendations set forth by SAI. Beginning with FY2025, OMES has taken the following measures: • Oversight and management of the ERA program has been transferred to the OMES Grant Management Office (OMES-GMO) which has staff with several years of grant experience. OMES-GMO has recently hired additional staff, and the two staff members dedicated to the management of the ERA program have 20+ years of combined federal grant specific experience. • To ensure that the subrecipient agreement includes all the required terms under the ERA Program and that the agreement does not expire, OMES-GMO and the Communities of Foundation of Oklahoma (CFO) have recently executed a Subrecipient Grant Agreement Amendment that details the responsibilities of OMES to monitor CFO and the duties and processes that CFO must follow in regard to ERA Program, including detailed cash management policies. See Attached – Grant Agreement Amendment. • OMES-GMO required the return of the remaining ERA2 Program funds from CFO to ensure proper oversight and review of ERA expenditures is performed. • OMES-GMO has a multi-level system of internal controls for grant management and oversight that includes routine monitoring, desk review, and site visits for all projects and associated project/administrative expenditures to ensure allowability, accuracy, and assist in the detection of fraud. For example, OMES-GMO’s process for disbursing funds to a subrecipient requires a written request from the subrecipient with supporting documentation, then OMES-GMO assigns a staff lead and secondary grant analyst to perform a primary and secondary review for compliance and to require additional supporting documentation if needed to approve the request. Once those reviews are completed and approved by the OMES-GMO staff, the Director of the OMES-GMO must approve the request before it is sent to the OMES Finance Division, who will then verify the calculated amount(s) before completing the disbursement to the subrecipient. These internal controls and policies have been implemented for the management and oversight of the ERA Program and provide a multilayer review that will prevent fraud and risk factors applicable to the ERA program. Additionally, the OMES-GMO staff assigned to the ERA program have the training and knowledge to ensure compliance with the Federal grant requirements. • Depending on the level of risk, OMES-GMO conducts monthly, bi-weekly or weekly meetings with each subrecipient to monitor the progress of projects and address any issues or changes that might impact the project. For the ERA Program, OMES-GMO conducts bi-weekly monitoring meetings with CFO and is currently reviewing documentation provided by CFO to ensure all current ERA projects are eligible under the ERA guidelines and that CFO is exercising the proper oversight over their subrecipients. • OMES-GMO will continue with their current ERA monitoring steps and internal controls and will work with CFO to ensure ERA program funds are spent in accordance with ERA program guidelines and state and federal regulations. Anticipated Completion Date Ongoing throughout the life of the grant Responsible Contact Person Brandy Manek

Finding Number 2023-089 Subject Heading (Financial) or AL no. and program name (Federal) ALN: 21.019 Federal Program name: Emergency Rental Assistance Program (ERA) Planned Corrective Action While documenting controls over subrecipient administrative expenditures for the ERA 1 and ERA 2 grants, we noted that OMES did not require the subrecipients to submit supporting documentation for administrative expenditures charged to the programs. Further, we determined one of the subrecipients, Communities Foundation of Oklahoma (CFO), did not have sufficient internal controls over administrative expenditures to ensure they were for allowable costs and activities. Community Foundation of Oklahoma 1. For 15 of 17, or 88.24%, of credit cards tested, the included at least one expenditure for unallowable costs. These costs also included gift cards. ($53,248.41 questioned costs) • We disagree with the finding and questioned costs as the amount for all mentioned questioned costs has been returned to the ERA program. CFO has also strengthened their internal controls and understanding to more accurately identify appropriate expenses to allocate to ERA Admin funds in the future. See attached Internal Controls. 2. For $28,661 of allowable credit card administrative expenditures, the expense was attributable to multiple jurisdictions and only 90.33% of the cost should have been charged to the State of Oklahoma; however, CFO was unable to support the proper allocation was completed and that 100% of the cost was not charged to the State. We determined we would question 9.67% of the allowable expenditures ($2,771.52 questioned costs), since the State paid for expenditures that were the responsibility of other jurisdictions. Note: all credit card transactions were ‘multi’ jurisdictions; however, the unallowable costs are questioned in the first bullet. • See response to 2023-028 - Second Condition and Context. 3. For 2 of 48, or 4.17%, of claims tested, the invoice was not itemized, and we were unable to determine if the administrative costs were allowable. ($32,589.33 questioned costs) • We disagree with the finding. Itemized invoices have been attached in Attachment “OneDrive_1_4_22-2025.zip” 4. For 3 of 48, or 6.25%, of claims tested, the costs were for services to non-profit Shelterwell, which is an organization that was formed by the Executive Director of Community Cares Partners (CCP) with CCP team members after CCP stopped accepting ERA applications. Shelterwell works with tenants and landlords to provide education and mediation between tenants and landlords but is not legally part of Communities Foundation of Oklahoma (CFO)/CCP and does not directly provide rental assistance. Therefore, all payments to Shelterwell do not directly support the administration of the ERA program and are not allowable administrative costs. ($3,847.90 questioned costs) • We partially agree in that the expenses listed for Shelterwell were incorrectly allocated to the Admin account. These expenses should have been expensed from their ERA2 Housing Stability grants. CFO has strengthened our internal controls and understanding to more accurately code and identify expenses, so they are expensed to the correct fund in the future. We partially disagree that the payments made to Shelterwell are unallowable. According to the 2024 ERA Compliance Supplement and FAQ 23, 10% of the funds under ERA1 and ERA2 may be used for housing stability services. The 2024 Compliance Supplement in describing Administrative Expenses, states, "Under ERA 1, a grantee may use up to 10 percent of the total award amount for direct and indirect administrative costs and may use up to 10 percent of the total award amount for housing stability services. Under ERA 2, a grantee may use up to 15 percent of the total award amount for direct and indirect administrative costs and may use up to 10 percent of the total award amount for housing stability services ..." This is also repeated in FAQ23. According to both 2024 Compliance Supplement and FAQ23, housing stability services include but are not limited to: eviction prevention and eviction diversion programs; mediation between landlords and tenants; housing counseling; fair housing counseling; housing navigators or promotors that help households access programs or find housing; case management related to housing stability; housing-related services for survivors of domestic abuse or human trafficking; legal services or attorney’s fees related to eviction proceedings and maintaining housing stability; and specialized services for individuals with disabilities or seniors that support their ability to access or maintain housing. Additionally, under FAQ 21, grantees may use ERA payments to make subawards to other entities, including nonprofit organizations and local governments, to administer ERA programs on behalf of the grantees. Therefore, payments to Shelterwell are allowable expenses b/c these non-profits provided services that fell under the allowable uses for Housing Stability Services and CFO was able to make a subaward to these non- profits in accordance with FAQ 21. 5. For 3 of 48, or 6.25%, of claims tested, the costs were for services for non-profit SidexSide (formerly LastMile) also created by CFO/CCP, which is an organization that provides job skills training and connects employers with participants seeking employment. SidexSide is not legally part of CFO/CCP and does not directly provide rental assistance; therefore, payments made to SidexSide do not directly support the administration of ERA program and are not allowable administrative costs. ($8,824.00 questioned costs) • We partially agree in that the expenses listed for SidexSide were incorrectly allocated to the Admin account. These expenses should have been expensed from their ERA2 Housing Stability grants. CFO has strengthened our internal controls and understanding to more accurately code and identify expenses, so they are expensed to the correct fund in the future. We partially disagree that the payments made to SidexSide are unallowable. According to the 2024 ERA Compliance Supplement and FAQ 23, 10% of the funds under ERA1 and ERA2 may be used for housing stability services. The 2024 Compliance Supplement in describing Administrative Expenses, states, "Under ERA 1, a grantee may use up to 10 percent of the total award amount for direct and indirect administrative costs and may use up to 10 percent of the total award amount for housing stability services. Under ERA 2, a grantee may use up to 15 percent of the total award amount for direct and indirect administrative costs and may use up to 10 percent of the total award amount for housing stability services ..." This is also repeated in FAQ23. According to both 2024 Compliance Supplement and FAQ23, housing stability services include but are not limited to: eviction prevention and eviction diversion programs; mediation between landlords and tenants; housing counseling; fair housing counseling; housing navigators or promotors that help households access programs or find housing; case management related to housing stability; housing-related services for survivors of domestic abuse or human trafficking; legal services or attorney’s fees related to eviction proceedings and maintaining housing stability; and specialized services for individuals with disabilities or seniors that support their ability to access or maintain housing. Additionally, under FAQ 21, grantees may use ERA payments to make subawards to other entities, including non-profit organizations and local governments, to administer ERA programs on behalf of the grantees. Therefore, payments to SidexSide are allowable expenses b/c these non-profits provided services that fell under the allowable uses for Housing Stability Services and CFO was able to make a subaward to these non- profits in accordance with FAQ 21. See attached NON CC 3-SidexSide.program tie to housing stability. 6. For 4 of 48, or 8.33%, of claims tested, the costs were unallowable and included items such as trainings unrelated to ERA, gift cards, alcohol, and food. ($1,549.76 questioned costs) • We agree and the funds were returned. See Attachment “NON CC 4 Refund” 7. For 1 of 48, or 2.08%, of claims tested, the costs were for the Afghan Legal Network project which partnered with CFO to provide ERA funds to Afghanistan refugees; SAI determined these costs are unallowable as the refugees were not Oklahoma residents, and not eligible for assistance. Therefore, administrative costs related to this project were also unallowable. ($498.00 questioned costs) • The expense listed for ALN was incorrectly allocated to the Admin account. This expense should have been expensed from their ERA2 Housing Stability grants. CFO has strengthened our internal controls and understanding to more accurately code and identify expenses, so they are expensed to the correct fund in the future. See also the response to Finding 2023-027. 8. For 1 of 48, or 2.08%, of claims tested, the cost was unrelated to ERA and unallowable. CFO/CCP has refunded the expense using private funds after SAI determined it was unallowable. ($250.00 questioned costs) • We acknowledge that CFO has refunded this expense while the FY23 audit was in process. 9. For 27 of 48, or 56.25%, of claims tested, the cost was allowable; however, the expense was attributable to multiple jurisdictions and only 90.33% of the cost should have been charged to the State. However, CFO/CCP was unable to support the proper allocation was completed and that 100% of the cost was not charged to the State. We question 9.67% of the allowable expenditures ($16,527.61 questioned costs) • See the response to Finding 2023-028 – Second Condition and Context. Oklahoma Office of Management and Enterprise Services (OMES) acknowledges the Oklahoma State Auditor and Inspector Office’s (SAI) findings that OMES did not implement the proper internal controls and oversight of the ERA Program during FY2023. However, OMES has taken steps to correct these findings and follow the recommendations set forth by SAI. Beginning with FY2025, OMES has taken the following measures: • Oversight and management of the ERA program has been transferred to the OMES Grant Management Office (OMES-GMO) which has staff with several years of grant experience. OMES-GMO has recently hired additional staff, and the two staff members dedicated to the management of the ERA program have 20+ years of combined federal grant specific experience. • To ensure that the subrecipient agreement includes all the required terms under the ERA Program and that the agreement does not expire, OMES-GMO and the Communities of Foundation of Oklahoma (CFO) have recently executed a Subrecipient Grant Agreement Amendment that details the responsibilities of OMES to monitor CFO and the duties and processes that CFO must follow in regard to ERA Program, including detailed cash management policies. See Attached – Grant Agreement Amendment. • OMES-GMO required the return of the remaining ERA2 Program funds from CFO to ensure proper oversight and review of ERA expenditures is performed. • OMES-GMO has a multi-level system of internal controls for grant management and oversight that includes routine monitoring, desk review, and site visits for all projects and associated project/administrative expenditures to ensure allowability, accuracy, and assist in the detection of fraud. For example, OMES-GMO’s process for disbursing funds to a subrecipient requires a written request from the subrecipient with supporting documentation, then OMES-GMO assigns a staff lead and secondary grant analyst to perform a primary and secondary review for compliance and to require additional supporting documentation if needed to approve the request. Once those reviews are completed and approved by the OMES-GMO staff, the Director of the OMES-GMO must approve the request before it is sent to the OMES Finance Division, who will then verify the calculated amount(s) before completing the disbursement to the subrecipient. These internal controls and policies have been implemented for the management and oversight of the ERA Program and provide a multilayer review that will prevent fraud and risk factors applicable to the ERA program. Additionally, the OMES-GMO staff assigned to the ERA program have the training and knowledge to ensure compliance with the Federal grant requirements. • Depending on the level of risk, OMES-GMO conducts monthly, bi-weekly or weekly meetings with each subrecipient to monitor the progress of projects and address any issues or changes that might impact the project. For the ERA Program, OMES-GMO conducts bi-weekly monitoring meetings with CFO and is currently reviewing documentation provided by CFO to ensure all current ERA projects are eligible under the ERA guidelines and that CFO is exercising the proper oversight over their subrecipients. • OMES-GMO will continue with their current ERA monitoring steps and internal controls and will work with CFO to ensure ERA program funds are spent in accordance with ERA program guidelines and state and federal regulations. Anticipated Completion Date Ongoing throughout the life of the grant Responsible Contact Person Brandy Manek

Finding Number 2023-088 Subject Heading (Financial) or AL no. and program name (Federal) ALN: 21.019 Federal Program name: Emergency Rental Assistance Program (ERA) Planned Corrective Action Condition and Context: When reviewing SFY23 payroll administrative expenditures, we noted that Communities Foundation of Oklahoma paid $2,372,400 in bonuses to 146 employees. Of these bonuses, 47 people received between $10,000 - $19,999, and 44 people received more than $20,000. We found the expenditures to be unallowable; we found no guidance that stated ERA administrative funds could be expended on bonuses. • Community Cares Partners (CCP) was established as a temporary, emergencyresponse initiative tasked with administering Emergency Rental Assistance Program (ERAP) funds on behalf of the State of Oklahoma and multiple jurisdictions. Although initially conceived as a short-term project, CCP ultimately administered nearly $150 million in federal funds over multiple years in response to a historic public health and housing crisis. To meet U.S. Treasury mandates to rapidly disburse funds—or risk recapture—CCP had to scale quickly, adapt continuously, and deliver results under unprecedented pressure. The complexity of federal guidance, evolving compliance expectations, and intense audit scrutiny required a workforce that was agile, highly skilled, and capable of operating in a fast- paced, high-stakes environment. To achieve this, Communities Foundation of Oklahoma (CFO), as CCP’s fiscal sponsor, implemented an innovative staffing model in which all CCP team members—including leadership—were engaged as independent contractors. This model allowed for rapid onboarding and deployment of services without placing undue strain on CFO’s internal team or disrupting the core functions of other nonprofit and government agencies during the pandemic. However, because these contractors were not employees, they did not receive traditional benefits such as health insurance, paid time off, or retirement contributions. To support retention, motivation, and high performance in the absence of such benefits, CCP established a performance bonus structure, as outlined in its “Fee-for-Services Rendered” policy. Bonuses were based on merit and tied directly to both individual and team accomplishments. Performance Bonuses Were Structured, Purposeful, and Aligned with Program Goals Bonuses were awarded in recognition of critical achievements, such as the complete spend-down of ERA-1 funds before the federal deadline—a milestone that required sustained, coordinated effort well beyond routine contract deliverables. These incentives were calculated using a combination of objective factors, including: · Tenure with the organization (recognizing longterm commitment); Recommendation of the team director (based on direct performance observations); · Average weekly hours worked (accounting for parttime vs. full-time contributions); · Pay rate and level of responsibility (reflecting role complexity and expectations); · Performance indicators such as quality of work, accuracy, initiative, leadership, teamwork, positive attitude, and contributions to process improvements. Bonuses were not automatic or uniformly distributed. Rather, they were awarded based on documented performance and in alignment with the responsibilities and accomplishments of each contractor. The process involved director-level recommendations and required approvals from CCP’s Chief Operating Officer and the Executive Director of CFO, ensuring appropriate oversight and accountability. Allowability Under Federal Guidelines While the ERA guidance does not specifically address performance bonuses, U.S. Treasury FAQs instruct grantees to establish their own internal policies and procedures—consistent with the statutes—and to follow them consistently when specific guidance is not provided. CCP’s bonus practices followed this directive. Moreover, the incentive structure aligns with the principles in 2 CFR § 200.430(f), which permits incentive compensation when it is reasonable, tied to performance, and paid pursuant to a good-faith agreement established before services are rendered. These bonus payments were not arbitrary. They were essential tools for incentivizing high-quality performance, encouraging efficiency and innovation, and sustaining a capable team during a national emergency. Each bonus was grounded in documented policy, approved through established protocols, and tied to clearly defined. For 4 of 116, or 3.45% of claims tested, the contract was for an unreasonable rate and the invoices provided were not itemized and specific enough to determine if the time spent was for an allowable activity related to ERA 1 or ERA 2. • The contract rates for CCP’s executive leadership—specifically, Executive Director and Chief Operating Officer were reasonable and justified given the scope of responsibility, experience, and industry standards. Both leaders operated as full-time independent contractors (a structure applied to all team members at CCP), and neither received employee benefits such as health insurance or paid time off, which materially impacts total compensation calculations. CCP was a high-capacity public-private partnership program of CFO. CCP/CFO was responsible for administering over $440 million in Emergency Rental Assistance Program (ERAP) funds from the U.S. Department of the Treasury on behalf of the State of Oklahoma and multiple local jurisdictions. CCP executive leadership managed a team of more than 150 individuals and carried out complex, time- sensitive operations to deliver critical housing stability services during the COVID- 19 public health emergency. Industry benchmarks (e.g., Guidestar / Candid data, 990 analyses) show that for nonprofits with comparable annual budgets ($150M+), full-time executive compensation for experienced leaders often ranges from $175,000 to over $300,000 annually— excluding benefits. Both contractors brought more than 15 years of relevant leadership experience and operated within that reasonable range. Their rates reflected both the magnitude of the public responsibility and the demands of launching and managing a large-scale, federally funded program under emergency conditions. Regarding invoice specificity, the submitted invoices reflected agreed- upon deliverables and outcomes consistent with contract terms and allowable activities under federal guidance. While not time-stamped or broken down by hour, they were reviewed and approved based on performance milestones. Additional documentation is uploaded to further demonstrate the alignment of time spent with allowable ERAP administrative activities. Invoices submitted followed the contract terms, including hours rendered. A sample calendar page was provided and redacted for PII. § 200.338 Restrictions on public access to records. For 9 of 116, or 7.76% of claims tested, the payment was for more than the contracted rate. • PARTIALLY AGREE: overpayment of $37 • DISAGREE: see Bonus justification below. • 4.2.22 addendum with $29.60/hr rate • 4.2.22 addendum with $29.60/hr • 4.2.22 addendum with $36/hr rate • 4.2.22 addendum with $31.25/hr rate • 4.2.22 addendum with $29.60/hr rate • 4.2.22 addendum with $38/hr rate • 4.2.22 addendum with $28/hr rate Also see CCP Contractor Increases April, 2022 spreadsheet Attachments OneDrive_1_4-22-2025 OneDrive_3_4-22-2025- Contracts For 23 of 116, or 9.83% of claims tested, the subrecipient was unable to provide a contract for the period paid. • The Independent contractors each signed contracts in 2021 which laid out specific terms and conditions under which the independent contractors would provide their services and be compensated. Although some of these contracts expired, second contracts and/or addendums were signed by those same independent contractors in 2023. The independent contractors continued to work under the same terms and conditions and continued to be paid the same remuneration in the time period between the expiration of the original contracts and when the new contracts and/or addendums were created and signed. According to 15 O.S. Section 133, an implied contract is on where the existence and terms are not explicitly stated but are inferred from the conduct of the parties. Because the original contracts contained the specific terms regarding services and payment and because these independent contractors continued to operate under those same terms and receive payment even in the interim between signed contracts, this shows that an implied contract existed under Oklahoma law. The original contracts expired in 2021 which was at the height of the Covid- 19 crisis. The entities involved were addressing more urgent matters to assist the people of Oklahoma with the objectives of the program and did not have the bandwidth to draft and sign new agreements when responding to more urgent matters. Therefore, given the surrounding circumstances and the overall intent of the parties, it can be logically deduced that an implied contract existed in the interim periods between any expiration of an original contract and the second contract and/or addendum being signed. For 9 of 116, or 7.76% of claims tested, the contract was not signed by the Executive Director and was not valid. • We partially agree the contracts for three are not currently available with the Executive Director’s signature. • We disagree, fully executed contracts for two are available for review in the attachment OneDrive_3_4-22- 2025. For 22 of 115, or 19.13% of claims tested, the payroll cost was allowable; however, the expense was attributable to multiple jurisdictions and only 90.33% of the cost should have been charged to the State of Oklahoma, but the subrecipient was unable to support the allocation was completed and that 100% of the cost was not charged to the State. • See response to audit finding 2023-028 regarding the second Condition and Context. Oklahoma Office of Management and Enterprise Services (OMES) acknowledges the Oklahoma State Auditor and Inspector Office’s (SAI) findings that OMES did not implement the proper internal controls and oversight of the ERA Program during FY2023. However, OMES has taken steps to correct these findings and follow the recommendations set forth by SAI. Beginning with FY2025, OMES has taken the following measures: • Oversight and management of the ERA program has been transferred to the OMES Grant Management Office (OMES-GMO) which has staff with several years of grant experience. OMES-GMO has recently hired additional staff, and the two staff members dedicated to the management of the ERA program have 20+ years of combined federal grant specific experience. • To ensure that the subrecipient agreement includes all the required terms under the ERA Program and that the agreement does not expire, OMES-GMO and the Communities of Foundation of Oklahoma (CFO) have recently executed a Subrecipient Grant Agreement Amendment that details the responsibilities of OMES to monitor CFO and the duties and processes that CFO must follow in regard to ERA Program, including detailed cash management policies. See Attached – Grant Agreement Amendment. • OMES-GMO required the return of the remaining ERA2 Program funds from CFO to ensure proper oversight and review of ERA expenditures is performed. • OMES-GMO has a multi-level system of internal controls for grant management and oversight that includes routine monitoring, desk review, and site visits for all projects and associated project/administrative expenditures to ensure allowability, accuracy, and assist in the detection of fraud. For example, OMES-GMO’s process for disbursing funds to a subrecipient requires a written request from the subrecipient with supporting documentation, then OMES-GMO assigns a staff lead and secondary grant analyst to perform a primary and secondary review for compliance and to require additional supporting documentation if needed to approve the request. Once those reviews are completed and approved by the OMES-GMO staff, the Director of the OMES-GMO must approve the request before it is sent to the OMES Finance Division, who will then verify the calculated amount(s) before completing the disbursement to the subrecipient. These internal controls and policies have been implemented for the management and oversight of the ERA Program and provide a multilayer review that will prevent fraud and risk factors applicable to the ERA program. Additionally, the OMES-GMO staff assigned to the ERA program have the training and knowledge to ensure compliance with the Federal grant requirements. • Depending on the level of risk, OMES-GMO conducts monthly, bi-weekly or weekly meetings with each subrecipient to monitor the progress of projects and address any issues or changes that might impact the project. For the ERA Program, OMES-GMO conducts bi-weekly monitoring meetings with CFO and is currently reviewing documentation provided by CFO to ensure all current ERA projects are eligible under the ERA guidelines and that CFO is exercising the proper oversight over their subrecipients. OMES-GMO will continue with their current ERA monitoring steps and internal controls and will work with CFO to ensure ERA program funds are spent in accordance with ERA program guidelines and state and federal regulations. Anticipated Completion Date Ongoing throughout the life of the grant Responsible Contact Person Brandy Manek

Finding Number 2023-028 Subject Heading (Financial) or AL no. and program name (Federal) ALN: 21.019 Federal Program name: Emergency Rental Assistance Program (ERA) Planned Corrective Action Condition and Context: While documenting controls over subrecipient program and administrative expenditures for the ERA 1 and ERA 2 grants, we noted that OMES did not require the subrecipients to submit supporting documentation for expenditures charged to the programs. Further, we determined one subrecipient, Communities Foundation of Oklahoma (CFO) did not have sufficient internal controls over program or administrative expenditures to ensure they were for allowable costs and activities. • Oklahoma Office of Management and Enterprise Services (OMES) acknowledges the Oklahoma State Auditor and Inspector Office’s (SAI) findings that OMES did not implement the proper internal controls and oversight of the ERA Program during FY2023. However, OMES has taken steps to correct these findings and follow the recommendations set forth by SAI. Beginning with FY2025, OMES has taken the following measures: • Oversight and management of the ERA program has been transferred to the OMES Grant Management Office (OMES-GMO) which has staff with several years of grant experience. OMES-GMO has recently hired additional staff, and the two staff members dedicated to the management of the ERA program have 20+ years of combined federal grant specific experience. • To ensure that the subrecipient agreement includes all the required terms under the ERA Program and that the agreement does not expire, OMES-GMO and the Communities of Foundation of Oklahoma (CFO) have recently executed a Subrecipient Grant Agreement Amendment that details the responsibilities of OMES to monitor CFO and the duties and processes that CFO must follow in regard to ERA Program, including detailed cash management policies. See Attached – Grant Agreement Amendment. • OMES-GMO required the return of the remaining ERA2 Program funds from CFO to ensure proper oversight and review of ERA expenditures is performed. • OMES-GMO has a multi-level system of internal controls for grant management and oversight that includes routine monitoring, desk review, and site visits for all projects and associated project/administrative expenditures to ensure allowability, accuracy, and assist in the detection of fraud. For example, OMES-GMO’s process for disbursing funds to a subrecipient requires a written request from the subrecipient with supporting documentation, then OMES-GMO assigns a staff lead and secondary grant analyst to perform a primary and secondary review for compliance and to require additional supporting documentation if needed to approve the request. Once those reviews are completed and approved by the OMES- GMO staff, the Director of the OMES-GMO must approve the request before it is sent to the OMES Finance Division, who will then verify the calculated amount(s) before completing the disbursement to the subrecipient. These internal controls and policies have been implemented for the management and oversight of the ERA Program and provide a multi-layer review that will prevent fraud and risk factors applicable to the ERA program. Additionally, the OMESGMO staff assigned to the ERA program have the training and knowledge to ensure compliance with the Federal grant requirements. • Depending on the level of risk, OMES- GMO conducts monthly, bi-weekly or weekly meetings with each subrecipient to monitor the progress of projects and address any issues or changes that might impact the project. For the ERA Program, OMES-GMO conducts bi-weekly monitoring meetings with CFO and is currently reviewing documentation provided by CFO to ensure all current ERA projects are eligible under the ERA guidelines and that CFO is exercising the proper oversight over their subrecipients. • OMES-GMO will continue with their current ERA monitoring steps and internal controls and will work with CFO to ensure ERA program funds are spent in accordance with ERA program guidelines and state and federal regulations. • Community Foundation of Oklahoma (CFO) Due to a classification misunderstanding, CFO recently changed its financial process and is currently tracking expenditures as a subrecipient. CFO does have internal controls for expenditures and using their established process to update the tracking of their expenditures. (attachment internal controls – expenditures) CFO is reconciling the administrative expenses to capture and show the costs associated with administering the program. Condition and Context: While reviewing all administrative management fees, we noted one of the subrecipients charged the ERA 1 and ERA 2 grants $5,585,126.89 in unallowable administrative costs (management fees) that were retained by the subrecipient and were not attributable to providing financial assistance and housing stability services. The management fees the subrecipient charged to the grant do not represent actual admin expenditures, but rather an arbitrary amount retained by CFO (Questioned costs - $5,585,126.89). See management fees referenced in finding 2023-091. • A spreadsheet showing administrative expenses for FY23 is included with the finding response. CFO has used the allocable percentage of 90.33%, as provided by SAI in the finding 2023-088, to show the portion of expenditures attributed to the state ERA program. All previous and subsequent years are currently going through the same reconciliation effort. Any charges that were deemed unallowable by SAI during this audit or previous audits, such as credit card charges, will be removed from the actual expenditures spreadsheet and noted in the financial software. Transactional data from the subrecipients' financial system are included as backup for the administrative expenses. Documentation was previously not requested for CFO’s expenditures. Supporting documentation is being provided at this time to substantiate the response more fully. CFO has included a sample of personnel expenses in the response to this finding as a show of good faith. (Attachment 2022-08 CFO Payroll Support Docs, OneDrive _1 _4 _22-2025) Condition and Context: In addition, during our test work for the ERA 1 program administrative limit, we noted that administrative costs charged to the program exceeded the 10% allowable limit by 5.81%, or $1,259,429 • Being this is a multiple year grant program that was set up as earned administrative funds based upon programmatic spend, an ebb and flow of admin earned, and expended, is directly in relation to the programmatic spend. Looking at one fiscal year as a snapshot does not present the entire picture accurately. Over the course of the grant, the administrative funds earned have been at or under the cap established by Treasury. accurately. Over the course of the grant, the administrative funds earned have been at or under the cap established by Treasury. Anticipated Completion Date Ongoing throughout the life of the grant Responsible Contact Person Brandy Manek

Finding Number 2023-027 Subject Heading (Financial) or AL no. and program name (Federal) ALN: 21.019 Federal Program name: Emergency Rental Assistance Program (ERA) Planned Corrective Action AUDIT BULLET POINT “Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Eligibility exceptions: • For 22 of 89, or 24.72%, of items tested, the applicant was an Afghanistan refugee and not a renter who lived in Oklahoma at the time of applying for assistance; therefore, they were not eligible, and the payment was unallowable. The subrecipient, Communities Foundation of Oklahoma, paid for the applicant to be in a hotel and then subsequently paid for their rent and utilities. Since the applicants were not eligible all payments were unallowable; therefore, we did not determine if the payment was calculated correctly or if the assistance exceeded 15 months for ERA 1 or 18 months for ERA 2. However, of these unallowable costs, we noted the following: • Some applicants were reimbursed for monthly lawn services as part of their monthly rental payment. • Several payments were made to the applicants after the initial payment without receiving an additional application or additional funds request (AFR) form (See FAQ #10).” OMES RESPONSE: The State disagrees that payments made to Afghan refugees were unallowable. The finding asserts that 22 applicants were ineligible for Emergency Rental Assistance (ERA) because they were Afghan refugees and were not “renters who lived in Oklahoma at the time of applying.” This interpretation is inconsistent with U.S. Department of the Treasury guidance, which does not require U.S. citizenship, legal residency, or prior tenancy in Oklahoma as a condition of eligibility. • Citizenship or Legal Residency Is Not a Requirement for ERA Eligibility. It is never mentioned in the ERA statute or Treasury guidance that U.S. citizenship, lawful residency, or duration of tenancy required. The U.S. Treasury’s ERA FAQ #1 explicitly outlines the four criteria for eligibility: • The household must be obligated to pay rent on a residential dwelling; • One or more individuals within the household must have experienced financial hardship due to the pandemic; • The household must demonstrate a risk of homelessness or housing instability; • Household income must be at or below 80% of area median income (AMI). These Afghan households were invited by our government leaders to resettle in Oklahoma as part of the federal government’s Operation Allies Welcome initiative. When the Afghans arrived in Oklahoma, they immediately sought housing, being assisted by agencies such as Catholic Charities. Obviously, they were not homeowners. As tenants or households seeking to rent housing during the midst of a pandemic without any immediate means of securing employment, they were experiencing housing instability and fully met the ERA Program 1 and 2 criteria. Upon arrival: • They were not homeowners; • They had no permanent housing; • They were working with nonprofit agencies like Catholic Charities to find housing; • Because of the pandemic, they were not able to secure work and had no or extremely low income; • They were at imminent risk of homelessness. Treasury has further emphasized in FAQ #1, “… these requirements provide for various means of documentation so that grantees may extend this emergency assistance to vulnerable populations without imposing undue documentation burdens…” Again, never is the word “residence or citizen” used, even in the footnotes. This language was clearly intended to include undocumented individuals, newly arrived refugees, and others in nontraditional or transitional housing situations. Furthermore, as noted in the CFO/CCP ERA application for rental assistance previously provided to SAI, the eligibility requirements do not require residency but that only the applicant live in the State of Oklahoma. Further Support: • September 9, 2021, Email between CCP/CFO and the Director of Tax and Housing Advocacy for the National Council of State Housing Agencies. Discusses that CCP was working with housing stability service partners, specifically Catholic Charities, to help with housing Afghans when they came to Oklahoma. Emails also clarify that the Afghan refugees would only be able to apply once they moved to Oklahoma. (See attached) • Sept 29, 2021 – Email from U.S. Dept. of State, Bureau of Populations, Refugees, and Migration (PRM), U.S. Department of State, which invited a variety of Federal Agency representatives to a call to hear from the OK Catholic Charities director to speak about the Oklahoma Catholic Charities “model of utilizing CARES Act funding to support both temporary and long term housing for Afghan arrivals and an additional hour was set aside for discussion of this model. Executive Director of the Oklahoma City Catholic Charities forwarded this email to CCP asking if she would join to assist with the discussion of this model. Listed below are the agencies that had representatives on the email. the National Security Council and Subcommittees  The White House – Organization of the National Security Council and Subcommittees  Executive Office of the President.  U.S. Department  Federal FEMA Office  U.S. Citizenship and Immigration Services  Homeland Security  Catholic Charities  U.S. Conference of Catholic Bishops  Administration of Children & Families  Governors, Biden Administration point person for Afghan Parolee Assistance. (See attached) • October 3, 2021, Follow-up Email thanking people regarding the presentation and for joining the call. “The insight, creativity, and partnership is inspiring and has the potential to assist so many Afghans.” Furthermore, an email was to the attendees of the presentation clarifying ERA as the funding source for Oklahoma’s model for developing housing resource for Afghan arrival. Additionally, it was stated that “We hope that these clarifications and enclosed links will help us understand how these funds may be leveraged to house Afghans when they are resettled from the bases to other locations around the country.” (see attached) • October 24, 2021, Email from ERA Outreach Team Leader, Emergency Housing Team, U.S. Department of the Treasury, to CCP wanting to connect them with Chicago who was looking to do some work with asylum seekers/refugees and was wanting to talk to other grantees who have worked with these populations using ERA funds. Note, this is an ERA Team Leader from the Treasury wanting CCP to share CCP/CFO’s ERA model. Obviously, the Treasury would not reach out to connect CCP/CFO to speak about their Afghan refugee model if they did not approve of the use of ERA funds to assist with housing the refugees. (See attached) • Treasury FAQ #37 – Addresses how grantees can promote access to assistance for all eligible households and is clear that the Guidance contemplates serving individuals from all background and nationalities, stating that grantees “should address barriers … including by providing program documents in multiple languages.” Furthermore, the Guidance states “Grantees should also provide, whether directly or through partner organizations, culturally and linguistically relevant outreach and housing stability services to ensure access to assistance for all eligible households.” In accordance with Title VI of the Civil Rights Act of 1964 (Title VI) ERA grantees must ensure they provide meaningful access to their limited-Englishproficiency (LEP) applicants and beneficiaries of their federally assisted programs, services, and activities. Finally, “Denial of an LEP person’s access to federally assisted programs, services, and activities is a form of nationalorigin discrimination prohibited under Title VI and Treasury’s Title VI implementing regulations at 31 CFR Part 22.” • Treasury guidance on creating applications for the ERA program with no mention of citizenship or residency requirements. Allow applicants to progress and self-attest if they cannot provide documentation - At the stage when applicants are asked to provide documents to establish COVID hardship, housing instability, income, or rental obligation, applicants should also be informed that they may self-attest and move forward in the application if they do not have those documents. • Disaster Housing Recovery Coalition, C/O National Low Income Housing Coalition (NLIHC) – Published an information sheet for recipients of Federal awards in response to the COVID-19 pandemic which detailed which awards did not consider immigration status when providing assistance. Under the ERA Program, the NLIHC stated that “The law establishing the Emergency Rental Assistance Program does not impose restrictions based on immigration status.” (Attached – labeled FAQs- Eligibility for Assistance Based on Immigration Status) 2. Hotel Stays Are Allowable Options for Temporarily Displaced Households Treasury provided a Broader Reading of “Obligated to Pay Rent on a Residential Dwelling,” and determined the costs of staying in a hotel are eligible expenses, and rental assistance could be provided to temporarily displaced households living in hotels. The audit finding narrowly interprets the term “obligated to pay rent” in FAQ #1. However, multiple Treasury FAQs — including FAQ #7, #26, and #35 — demonstrate that the Department intended a flexible, inclusive interpretation, recognizing the emergency nature of the program and the housing challenges faced by displaced individuals and families and reinforces that the term “residential dwelling” is not limited to traditional apartments with leases but includes hotels and other temporary housing used in transition. • FAQ #7: Permits hotel or motel costs to be covered using ERA funds when the household lacks alternative housing options, even without a formal lease. • FAQ #26: States that rental assistance may be provided to households residing temporarily in hotels or motels when they are • displaced or between housing. FAQ #27: Allows rental assistance for rent-to- own households, further demonstrating that the key is ERA CANNOT be used for homeowners (FAQ #20). • FAQ #35: Specifically authorizes relocation assistance for households who have been evicted or otherwise displaced and are attempting to secure new permanent housing. These provisions explicitly contemplate support for individuals and families—such as Afghan refugees— who were temporarily displaced and used hotels as the only available rental housing (in truth, many Oklahomans are forced to do this) until suitable housing could be secured (rendered more difficult for larger families – up to 10+ children). As allowed under Treasury ERA FAQs #7 and #26, hotel stays were covered when used as transitional housing due to lack of available rental stock—especially for large families. Afghan refugees fell squarely within this provision. 3. Lawn Services as Part of Rent This is allowable as part of the cost of the rental of the premises. For all rentals that have a yard there is lawn maintenance, and the landlord has the option to determine how to charge (or absorb) that cost. These costs were not reimbursed as separate utility costs, but as part of the monthly rental obligation agreed to in writing. 4. Subsequent Payments Without AFR Forms • ERA guidance allows grantees to implement streamlined processes to reduce burden and deliver aid efficiently. CCP’s internal policies permitted continued rental and utility assistance without requiring new applications or additional AFR forms, so long as eligibility remained unchanged and appropriate documentation was on file. This approach is aligned with Treasury’s consistent encouragement to minimize administrative barriers in the interest of program responsiveness and urgency. Treasury guidance also stated, Only ask applicants for information that is required by the ERA statutes and Treasury’s guidance to provide them assistance. AUDIT BULLET POINT “Further, while summarizing the data on ‘applicant’, we noted one line item was made up of 498 individual payments made to hotels on behalf of the Afghanistan refugees, which consisted of 186 applicants. We identified 185 of these applicants had payments for Afghanistan refugees to live in hotels prior to applying to the ERA program. Since, at the time of the application, they were not obligated to pay rent on a residential dwelling per Department of Treasury FAQ 1 and established CCP ERA policy, the cost is unallowable. This resulted in $1,727,687.64 in questioned costs (these costs do not include payments previously questioned in the first bullet).” OMES RESPONSE: OMES disagrees with this finding. Multiple Treasury FAQs, including #7, #26, and #35, reinforces the term “residential dwelling” is not limited to traditional apartments but may include hotels and other temporary housing used in transition. Also, FAQ #8 states that a beneficiary is not required to have rental arrears to receive assistance and permits enrollment “of households for only prospective benefits.” The only restriction is that for the ERA1 program, if an applicant is requesting prospective assistance and the applicant also has rental arrears, the grantee must also provide assistance to reduce those arrears (this restriction does not apply to ERA2). Finally, per FAQ # 13, eligible households do not have to be in their current rental home when the COVID-19 public health emergency was declared, stating, “Payments under ERA are provided to help households meet housing costs that they are unable to meet as a result of the COVID-19 pandemic. There is no requirement regarding the length of tenure in the current unit.” Oklahoma Office of Management and Enterprise Services (OMES) acknowledges the Oklahoma State Auditor and Inspector Office’s (SAI) findings that OMES did not implement the proper internal controls and oversight of the ERA Program during FY2023. However, OMES has taken steps to correct these findings and follow the recommendations set forth by SAI. Beginning with FY2025, OMES has taken the following measures: • Oversight and management of the ERA program has been transferred to the OMES Grant Management Office (OMES-GMO) which has staff with several years of grant experience. OMES-GMO has recently hired additional staff, and the two staff members dedicated to the management of the ERA program have 20+ years of combined federal grant specific experience. • To ensure that the subrecipient agreement includes all the required terms under the ERA Program and that the agreement does not expire, OMES-GMO and the Communities of Foundation of Oklahoma (CFO) have recently executed a Subrecipient Grant Agreement Amendment that details the responsibilities of OMES to monitor CFO and the duties and processes that CFO must follow in regard to ERA Program, including detailed cash management policies. See Attached – Grant Agreement Amendment. • OMES-GMO required the return of the remaining ERA2 Program funds from CFO to ensure proper oversight and review of ERA expenditures is performed. • OMES-GMO has a multi-level system of internal controls for grant management and oversight that includes routine monitoring, desk review, and site visits for all projects and associated project/administrative expenditures to ensure allowability, accuracy, and assist in the detection of fraud. For example, OMESGMO’s process for disbursing funds to a subrecipient requires a written request from the subrecipient with supporting documentation, then OMES-GMO assigns a staff lead and secondary grant analyst to perform a primary and secondary review for compliance and to require additional supporting documentation if needed to approve the request. Once those reviews are completed and approved by the OMES-GMO staff, the Director of the OMESGMO must approve the request before it is sent to the OMES Finance Division, who will then verify the calculated amount(s) before completing the disbursement to the subrecipient. These internal controls and policies have been implemented for the management and oversight of the ERA Program and provide a multi-layer review that will prevent fraud and risk factors applicable to the ERA program. Additionally, the OMES-GMO staff assigned to the ERA program have the training and knowledge to ensure compliance with the Federal grant requirements. • Depending on the level of risk, OMES-GMO conducts monthly, bi-weekly or weekly meetings with each subrecipient to monitor the progress of projects and address any issues or changes that might impact the project. For the ERA Program, OMES-GMO conducts biweekly monitoring meetings with CFO and is currently reviewing documentation provided by CFO to ensure all current ERA projects are eligible under the ERA guidelines and that CFO is exercising the proper oversight over their subrecipients. OMES-GMO will continue with their current ERA monitoring steps and internal controls and will work with CFO to ensure ERA program funds are spent in accordance with ERA program guidelines and state and federal regulations. Anticipated Completion Date Ongoing throughout the life of the grant Responsible Contact Person Brandy Manek

Finding Number 2023-108 Subject Heading (Financial) or AL no. and program name (Federal) ALN: 21.019 Federal Program name: Coronavirus Relief Fund (CRF) Planned Corrective Action The State agrees with this finding. Within OMES, oversight and management of Federal grants has been transferred to the OMES Grant Management Office (OMES-GMO) which is staffed with individuals with several years of grant experience. OMES-GMO has a multi-level system of internal controls for grant management and oversight that includes routine monitoring, desk review, and site visits for all projects and associated project/administrative expenditures to ensure allowability, accuracy, and assist in the detection of fraud. Finally, OMES Finance has developed processes which provide for a more thorough coding of expenditures and proper review of expenditures when reporting on their GAAP Z. The State disagrees with the finding. The State had two Grant Award Notifications in place with the Boys and Girls Club which reflects the monies awarded to be used on the capital improvements and Club on the Go Mobile Clubhouses. This indicates the funds were obligated during the covered period. Per the email from the Keri for Jill Geiger Consulting, no signatures on the GANs were required and the Uniform Guidance does not require the GAN to be signed. Within OMES, oversight and management of Federal grants has been transferred to the OMES Grant Management Office (OMES-GMO) which is staffed with individuals with several years of grant experience. OMES-GMO has a multi-level system of internal controls for grant management and oversight that includes routine monitoring, desk review, and site visits for all projects and associated project/administrative expenditures to ensure allowability, accuracy, and assist in the detection of fraud. OMESGMO’s internal control processes ensure subrecipient risk assessments are performed and that proper grant awarding documentation is provided to subrecipients. Anticipated Completion Date September 2022 Responsible Contact Person Brandy Manek

Finding Number 2023-098 Subject Heading (Financial) or AL no. and program name (Federal) ALN: 21.019 Federal Program name: Coronavirus Relief Fund (CRF) Planned Corrective Action OMES Finance has implemented proper controls for their SEFA process to ensure costs are reported on the correct basis of accounting. OMES agrees with this finding and has put measures in place to correct this issue. Within OMES, oversight and management of Federal grants has been transferred to the OMES Grant Management Office (OMES-GMO) which is staffed with individuals with several years of grant experience. OMES-GMO has a multi-level system of internal controls which includes a process for reviewing funding requests to ensure expenditures are allowable under the federal guidelines. The State agrees. Although the delivery of the software occurred during the covered period, the invoice was paid outside of the liquidation period. The State agrees with this finding and has put measures in place to correct this issue. Within OMES, oversight and management of Federal grants has been transferred to the OMES Grant Management Office (OMES-GMO) which is staffed with individuals with several years of grant experience. OMES-GMO has a multi-level system of internal controls which includes a process for reviewing funding requests to ensure expenditures are allowable under the federal guidelines. Anticipated Completion Date September 2022 Responsible Contact Person Brandy Manek

Finding Number 2023-096 Subject Heading (Financial) or AL no. and program name (Federal) ALN: 21.019 Federal Program name: Coronavirus Relief Fund (CRF) Planned Corrective Action The State agrees with this finding. Within OMES, oversight and management of Federal grants has been transferred to the OMES Grant Management Office (OMES-GMO) which is staffed with individuals with several years of grant experience. OMES-GMO has a multi-level system of internal controls for grant management and oversight that includes routine monitoring, desk review, and site visits for all projects and associated project/administrative expenditures to ensure allowability, accuracy, and assist in the detection of fraud. Finally, OMES Finance has developed processes which provide for a more thorough coding of expenditures and proper review of expenditures when reporting on their GAAP Z. The State disagrees with the finding. The State had two Grant Award Notifications in place with the Boys and Girls Club which reflects the monies awarded to be used on the capital improvements and Club on the Go Mobile Clubhouses. This indicates the funds were obligated during the covered period. Per the email from the Keri for Jill Geiger Consulting, no signatures on the GANs were required and the Uniform Guidance does not require the GAN to be signed. Anticipated Completion Date September 2022 Responsible Contact Person Brandy Manek

Finding Number 2023-094 Subject Heading (Financial) or AL no. and program name (Federal) ALN: 21.019 Federal Program name: Coronavirus Relief Fund (CRF) Planned Corrective Action The State agrees in part and the State disagrees in part. In regard to payments made to Jill Geiger Consulting in the amounts of $39,957.00 and $28,272.00, please see attached documentation of time and effort of services provided during FY2023 which were also paid with by CRF funds in FY2023. Please scroll down on the timesheet reports and refer to the Notes column for descriptions. Additionally, the CRF weekly update log is from JGC and gives more details for services provided. For the payments made to Jill Geiger Consulting for the other amounts ($27,083.33 and $34,650), these reimbursements occurred in FY2023 but were not for services provided in FY2023, but for FY2022. If you review the “Summary of requested vouchers Jill Geiger,” the payment of $34,650 occurred on 8/1/2022 but was paid to cover services in May and June 2022. For invoice v00160672 in the amount of $27,083.33, the payment was made July 5, 2022 (FY23) but covered services for April 22 (FY22). You will be able to see more instances of this in the Summary and attached invoices for that same amount. Therefore, the State requests these be taken out of the audit review and findings for FY2023 as the services were not provided in FY2023. The State of Oklahoma agrees in part and disagrees in part. The State agrees that a multi-level system of internal controls for grant management and oversight that includes routine monitoring, desk review, and site visits for all projects and associated project/administrative expenditures, will help ensure allowability, accuracy, and assist in the detection of fraud. Within OMES, oversight and management of Federal grants has been transferred to the OMES Grant Management Office (OMES-GMO). The OMES-GMO is staffed with individuals, who have several years of grant experience implementing these internal controls and procedures. Anticipated Completion Date September 2022 Responsible Contact Person Brandy Manek

Finding Number 2023-052 Subject Heading (Financial) or AL no. and program name (Federal) #17.225 Unemployment Insurance Planned Corrective Action While the agency does not completely disagree with the Condition, Cause and Effect as documented by the auditors, the agency believes additional considerations are important in drawing conclusions about whether all payments associated with the $1,578,278 in claims identified in this finding are conclusively fraudulent. We worked closely with the auditors to review these claims and had previously identified over 90% of the claims through the agency’s own internal fraud review processes and initiated recovery of any funds paid for claims identified as fraudulent. As we have stated in previous years, conclusions drawn by the auditors around this risk reflect the worst-case scenario based on the information available. OESC processes are ever-evolving and improving to address fraud prevention and detection, as the threat from bad actors will continue in perpetuity. Oklahoma is one of few states that utilizes identity proofing as a gatekeeper to the claim application process. Though OESC launched an improved version of VerifyOK in November 2022, it took time to refine the logic behind the application that is expected to further decrease the potential findings of fraudulent claims for future audits. The agency continues to make fraud prevention a priority and is engaging with federal partners, other state agencies and vendor partners to be vigilant in anticipating trends in fraud activity. While we believe we are expending appropriate levels of effort in this area, we also want to acknowledge that the complexity and ever-changing nature of the fraud space will continue to make this a difficult risk to mitigate entirely. Anticipated Completion Date The efforts required for fraud prevention are not expected to end, as bad actors are expected to continually pursue new methods to exploit unemployment benefit systems in all states. Responsible Contact Person Michelle Britten, Chief Administrative Officer

Finding Number 2023-201 Subject Heading (Financial) or AL no. and program name (Federal) 12.401: National Guard Military Operations and Maintenance Projects Program Planned Corrective Action OMD agrees with the auditors’ finding that OMD could not locate or provide the proper documentation to verify the federal cost share for maintenance personnel assigned to Appendix 1. The CFO will request an updated personnel listing from the federal Director of Engineering for state employees authorized federal reimbursement through Appendix 1 as well as the supporting documentation to validate the allowable costs for reimbursement. These source documents will be maintained in the Appendix 1 files on the Oklahoma National Guard shared portal for the required records retention period with training provided to OMD staff on where to locate the documents. Anticipated Completion Date Beginning of new fiscal year—July 1, 2025 Responsible Contact Person Angela Tackett, CFO

Finding Number 2023-038 Subject Heading (Financial) or AL no. and program name (Federal) CN CLUSTER – SCHOOL BREAKFAST PROGRAM; NATIONAL SCHOOL LUNCH PROGRAM, SPECIAL MILK PROGRAM FOR CHILDREN, FRESH FRUITS AND VEGETABLES PROGRAM AL #10.553, 10.555; 10.556; 10.559; 10.582 Planned Corrective Action Additional training of field-based staff will take place covering the areas of the SFSP review to ensure that meal counts and claim numbers are correct. A SFSP review will not be conducted prior to a claim being filed unless the SFSP program ends prior to a claim being filed. USDA guidance “encourages” a claim review to be conducted when an SFSP review is being conducted. If a sponsor operates for a month or less the review must take place while the program is operating therefore a claim would not be able to be validated. Anticipated Completion Date May 2025 (once SFSP reviews start for summer 2025) Responsible Contact Person Jennifer Weber

Finding Number 2023-105 Subject Heading (Financial) or AL no. and program name (Federal) 10.542 - Pandemic EBT – Food Benefits Planned Corrective Action The P-EBT program is no longer issuing benefits. Should a similar program be required in the future, the DHS will ensure internal controls are in place to avoid duplicate or erroneous payments. Anticipated Completion Date N/A Responsible Contact Person Sondra Shelby

Finding Number: 2023-022 Finding Name: Failure to Discontinue CHIP Benefits for Ineligible Individuals Finding Condition(s): The Illinois Department of Healthcare and Family Services (DHFS) improperly continued providing benefits under the Children’s Health Insurance Program (CHIP) program to individuals who were over the age of 19 prior to the start of the federal Public Health Emergency for COVID-19 (PHE) on March 13, 2020. Name of Contact Person(s): • Jacqueline Myers, Bureau Chief - Illinois Department of Healthcare and Family Services, Division of Eligibility • Phronsie Spaulding, Audit Compliance - Illinois Department of Healthcare and Family Services, Division of Eligibility Corrective Action(s): The DHFS accepts this finding for the 19-year-olds identified as receiving assistance under the CHIP program prior to the onset of the federal PHE. Those receiving assistance during the PHE were allowable under the Centers for Medicare and Medicaid Services’ Award Letter. CHIP eligibility for 19-year-olds was not allowable 14 months following the end of the PHE. These cases were redetermined in the State's federally required Unwinding Plan for which additional staff were hired and trained. The DHFS continues to review eligibility determinations for effectiveness and create a plan of action. Current data, as of April 2025, supports the success of the plan as these cases have decreased by 98%. Proposed Completion Date: December 31, 2025

Finding Number: 2023-016 Finding Name: Improper TANF Beneficiary Payments Finding Condition(s): The Illinois Department of Human Services (IDHS) made improper payments to beneficiaries of the Temporary Assistance for Needy Families (TANF) program. In addition, the IDHS identified a system error in June 2025 impacting beneficiaries whose benefit payments were calculated using diverted income. Name of Contact Person(s): Elizabth Lusk, Social Service Program Planner – Illinois Department of Human Services, Division of Family and Community Services Corrective Action(s): As of June 30, 2025, the IDHS’ Office of Policy and Program Integrity and the IDHS’ Office of Family Community Resource Centers discussed and formulated a plan to ensure payments are properly calculated and paid. Additionally, a training will be provided for caseworkers that pertains to reviewing the case summary for income errors or sanction errors, etc. Proposed Completion Date: June 30, 2026

Finding Number: 2023-014 Finding Name: Unallowable Costs Charged to the TANF and CCDF Cluster Programs Finding Condition(s): The Illinois Department of Human Services (IDHS) could not provide documentation to support payments made on behalf of beneficiaries of the Temporary Assistance for Needy Families (TANF) and CCDF Cluster (CCDF) programs. Additionally, the IDHS had not performed a monitoring review in 2023 or either of the previous two fiscal years to ensure billing information provided by the child care providers is accurate for any of the providers sampled. As a result, IDHS does not have adequate controls in place to ensure information provided by providers is accurate and the related child care payments made were appropriate. Name of Contact Person(s): • Felicia Gray, Associate Director of Operations – Illinois Department of Human Services, Division of Early Childhood • Elizabeth Lusk, Social Service Program Planner – Illinois Department of Human Services, Division of Family and Community Services Corrective Action(s): The IDHS will develop a procedure for periodic reviews of billing certificates for payments entered through the Interactive Voice Response (IVR) system. Additionally, the IDHS will develop forms, notices, and tools needed to implement the review process. Furthermore, the IDHS will develop and implement a communication plan to announce upcoming reviews that includes the Service Employees International Union (SEIU), the Division of Early Childhood (DEC), Child Care Resource and Referrals (CCR&Rs), and all providers using the Interactive Voice Response (IVR). Once these items are developed, the IDHS will determine needed changes to the IDHS’ administrative rules, its Child Care Assistance Program (CCAP) Policy, and its CCDF State Plan response. After obtaining the necessary leadership approvals, the IDHS will begin conducting IVR reviews. Proposed Completion Date: January 1, 2026