Corrective Action Plans

Finding 1200648 (2025-047)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Procurement, Suspension & Debarment Subrecipient Monitoring Allowable Costs / Cost Principles

Finding Number: 2025-047 Finding: The Department of Social and Health Services, Home and Community Living Administration, did not have adequate internal controls over and did not comply with survey requirements for Medicaid intermediate care facilities. Program: 93.775 – State Medicaid Fraud Control...

Finding Number: 2025-047 Finding: The Department of Social and Health Services, Home and Community Living Administration, did not have adequate internal controls over and did not comply with survey requirements for Medicaid intermediate care facilities. Program: 93.775 – State Medicaid Fraud Control Units 93.777 – State Survey and Certification of Health Care Providers and Suppliers 93.778 – Grants to States for Medicaid 93.778 – COVID-19 Grants to States for Medicaid Compliance Requirement: Special Tests and Provisions – Provider Health and Safety Standards Questioned Costs: $0 Status: Corrective action in progress Corrective Action: The Department partially concurs with the finding. The Department was not able to meet the Intermediate Care Facilities for Individuals with Intellectual Disabilities (ICF-IID) survey requirements due to a backlog from prior years, not because of lack of internal controls. It was through applied internal controls that we identified concerns and were able to allocate resources to address the most serious concerns. The Department has made efforts since fiscal year 2023 to address the backlog of complaints and recertification surveys, but resources had to be prioritized to handle new complaints. There is only one team that manages surveys, complaints, and revisits for the entire state. To optimize the use of resources, the Field Manager meets with the Administrative Assistant on a quarterly basis to review the 365-day average report and determine if survey schedules need to be modified to meet federal requirements. To continue to address this audit issue, Regional Administrators have met with their ICF-IID teams to review survey scheduling for the year to ensure teams will be able to meet targeted survey completion dates and the required recertification timeframes. As of November 2025, the Department met compliance with the 15.9-month recertification survey interval measure based on the 2025 CMS State Performance Measurement Report. By August 2026, the Department expects to meet compliance with the 12.9-month statewide average. Prior Findings: The conditions noted in this finding were previously reported in findings 2024-078, 2023-078, 2020-053, 2019-061, 2018–052, 2017-042, 2016-037, 2015-045, and 2014-046. Completion Date: Estimated August 2026 Agency Contact: Richard Meyer External Compliance Audit Manager Richard.Meyer@dshs.wa.gov

View Audit 395688

Finding 1200647 (2025-046)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Allowable Costs / Cost Principles HUD Housing Programs

Finding Number: 2025-046 Finding: The Department of Social and Health Services, Home and Community Living Administration, did not have adequate internal controls over and did not comply with survey requirements for Medicaid nursing homes. Program: 93.775 – State Medicaid Fraud Control Units 93.777 –...

Finding Number: 2025-046 Finding: The Department of Social and Health Services, Home and Community Living Administration, did not have adequate internal controls over and did not comply with survey requirements for Medicaid nursing homes. Program: 93.775 – State Medicaid Fraud Control Units 93.777 – State Survey and Certification of Health Care Providers and Suppliers 93.778 – Grants to States for Medicaid 93.778 – COVID-19 Grants to States for Medicaid Compliance Requirement: Special Tests and Provisions – Provider Health and Safety Standards Questioned Costs: $0 Status: Corrective action in progress Corrective Action: The Department partially concurs with the finding. The Department was not able to meet the Nursing Home survey requirements due to a backlog from prior years, not because of lack of internal controls. It was through applied internal controls that we identified concerns and were able to allocate resources to address the most serious concerns. The Department has made efforts since fiscal year 2023 to address the backlog of complaints and recertification surveys, but resources had to be prioritized to handle new complaints. There is only one team that manages surveys, complaints, and revisits for the entire state. To optimize the use of resources, the Field Manager meets with the Administrative Assistant on a quarterly basis to review the 365-day average report and determine if survey schedules need to be modified to meet federal requirements. To continue to address this audit issue, Regional Administrators have met with their Nursing Home teams to review survey scheduling for the year to ensure teams will be able to meet targeted survey completion dates and the required recertification timeframes. As of November 2025, the Department met compliance with the 15.9-month recertification survey interval measure based on the 2025 CMS State Performance Measurement Report. By August 2026, the Department expects to meet compliance with the 12.9-month statewide average. Prior Findings: The conditions noted in this finding were previously reported in findings 2024-079, 2023-079, and 2020-054. Completion Date: Estimated August 2026 Agency Contact: Richard Meyer External Audit Compliance Manager Richard.Meyer@dshs.wa.gov

View Audit 395688

Finding 1200646 (2025-045)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Procurement, Suspension & Debarment Subrecipient Monitoring Special Tests & Provisions

Finding Number: 2025-045 Finding: The Department of Health did not have adequate internal controls to ensure it complied with transplant hospital survey statement of deficiencies and plan of corrections timelines. Program: 93.775 – State Medicaid Fraud Control Units 93.777 – State Survey and Certifi...

Finding Number: 2025-045 Finding: The Department of Health did not have adequate internal controls to ensure it complied with transplant hospital survey statement of deficiencies and plan of corrections timelines. Program: 93.775 – State Medicaid Fraud Control Units 93.777 – State Survey and Certification of Health Care Providers and Suppliers 93.778 – Grants to States for Medicaid 93.778 – COVID-19 Grants to States for Medicaid Compliance Requirement: Special Tests and Provisions – Provider Health and Safety Standards Questioned Costs: $0 Status: Corrective action complete Corrective Action: The Department has implemented adequate internal controls to ensure compliance with federal requirements. Prior to the commencement of audit work in May 2025, the Department had already developed and implemented a management tracker that actively monitors transplant hospitals’ Statement of Deficiency issuance and Plan of Correction due dates. Compliance with federal requirements resulting from the strengthened internal controls will be evident in future audit cycles. Prior Findings: None Completion Date: May 2025 Agency Contact: Jeff Arbuckle External Audit Manager (360) 701-0798 Jeff.Arbuckle@doh.wa.gov

View Audit 395688

Finding 1200645 (2025-044)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Internal Control / Segregation of Duties Special Tests & Provisions

Finding Number: 2025-044 Finding: The Department of Health did not have adequate internal controls over and did not comply with requirements to ensure timely review of hospital complaints. Program: 93.775 – State Medicaid Fraud Control Units 93.777 – State Survey and Certification of Health Care Pro...

Finding Number: 2025-044 Finding: The Department of Health did not have adequate internal controls over and did not comply with requirements to ensure timely review of hospital complaints. Program: 93.775 – State Medicaid Fraud Control Units 93.777 – State Survey and Certification of Health Care Providers and Suppliers 93.778 – Grants to States for Medicaid 93.778 – COVID-19 Grants to States for Medicaid Compliance Requirement: Special Tests and Provisions – Provider Health and Safety Questioned Costs: $0 Status: Corrective action complete Corrective Action: The Department has implemented adequate internal controls for timely review of hospital complaints and has developed performance measures which are actively monitored monthly to assess compliance with federal requirements. The Department has taken the following actions: • In July 2024, modified and redesigned the enforcement database to capture the two-day review entries. • In August 2024, instituted a new process to include a date stamping method and allow data entry to capture the “received” and “reviewed” dates in the database. • In September 2024, developed a report to show the two-day review dates and started monitoring the requirement in January 2025 as part of the office performance measures. • In October 2025, transferred the Complaint Intake Unit from the Office of Investigative and Legal Services to be placed directly under the Office of Health Systems Oversight. Prior Findings: The conditions noted in this finding were previously reported in findings 2024-076 and 2023-076. Completion Date: October 2025 Agency Contact: Jeff Arbuckle External Audit Manager (360) 701-0798 Jeff.Arbuckle@doh.wa.gov

View Audit 395688

Finding 1200641 (2025-040)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Special Tests & Provisions Allowable Costs / Cost Principles

Finding Number: 2025-040 Finding: The Health Care Authority did not have adequate internal controls over and did not comply with managed care financial audit requirements. Program: 93.767 – Children's Health Insurance Program 93.767 – COVID-19 Children's Health Insurance Program 93.775 – State Medic...

Finding Number: 2025-040 Finding: The Health Care Authority did not have adequate internal controls over and did not comply with managed care financial audit requirements. Program: 93.767 – Children's Health Insurance Program 93.767 – COVID-19 Children's Health Insurance Program 93.775 – State Medicaid Fraud Control Units 93.777 – State Survey and Certification of Health Care Providers and Suppliers 93.778 – Grants to States for Medicaid 93.778 – COVID-19 Grants to States for Medicaid Compliance Requirement: Special Tests and Provisions – Managed Care Financial Audit Questioned Costs: $0 Status: Corrective action complete Corrective Action: In January 2025, the Authority implemented new contract language requiring Managed Care Organizations (MCOs) to submit audited financial reports in accordance with Generally Accepted Accounting Principles (GAAP) and Generally Accepted Auditing Standards (GAAS). MCOs are required to submit the GAAP and GAAS statements beginning with the June 2026 submission. Prior Findings: The conditions noted in this finding were previously reported in findings 2024-074, 2023-073, 2022-054, and 2021-048. Completion Date: January 2025 Agency Contact: Kari Summerour, CPA External Audit Compliance Manager (360) 725-9586 Kari.Summerour@hca.wa.gov

View Audit 395688

Finding 1200640 (2025-039)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Procurement, Suspension & Debarment Subrecipient Monitoring Allowable Costs / Cost Principles

Finding Number: 2025-039 Finding: The Health Care Authority did not have adequate internal controls over and did not comply with federal provider eligibility requirements for the Medicaid and Children’s Health Insurance Program. Program: 93.767 – Children’s Health Insurance Program 93.767 – COVID-19...

Finding Number: 2025-039 Finding: The Health Care Authority did not have adequate internal controls over and did not comply with federal provider eligibility requirements for the Medicaid and Children’s Health Insurance Program. Program: 93.767 – Children’s Health Insurance Program 93.767 – COVID-19 Children’s Health Insurance Program 93.775 – State Medicaid Fraud Control Units 93.777 – State Survey and Certification of Health Care Providers and Suppliers 93.778 – Grants to States for Medicaid 93.778 – COVID-19 Grants to States for Medicaid Compliance Requirement: Special Tests and Provisions – Provider Eligibility (Screening and Enrollment) Questioned Costs: $641 Status: Corrective action in progress Corrective Action: The Authority partially concurs with the finding. Fingerprint based criminal background checks The Authority concurs that a fingerprint-based criminal background check process for high-risk providers was not implemented during the audit period. In coordination with the Centers for Medicare & Medicaid Services (CMS) and the Washington State Patrol, the Authority has developed the required process and is in the final stages of implementation. The program is expected to be launched by March 31, 2026, and will apply to all providers designated as high-risk. Updated license information in ProviderOne When a professional license on a provider record expires, ProviderOne automatically end-dates taxonomies associated with the provider. However, when a provider is enrolled with multiple agencies and only one associated license has expired, the system does not currently end-date the related taxonomies. Currently, 37 of 113,940 servicing-only providers are affected while none of the approximately 9,000 billing providers are impacted. The Authority submitted a system change request in March 2026 to ensure applicable taxonomies are automatically end-dated in these scenarios. In the interim, the Authority developed a weekly report and implemented a process to identify providers with applicable taxonomies that need manually end-dated until the system enhancement is deployed. ProviderOne did not deactivate providers timely ProviderOne is designed to automatically inactivate a provider’s domain when revalidation is not completed timely. Due to an operational issue, a limited number of providers were not deactivated as required. Currently, 50 of approximately 9,000 billing providers are impacted. The Authority submitted a system change request in March 2026 to remediate this issue and prevent recurrence. In the interim, the Authority will conduct weekly monitoring and manually inactivate affected provider domains until the system correction is implemented. Ownership disclosures The Authority does not concur with the determination that it is not in compliance with federal requirements governing ownership disclosures. The Authority’s process requires providers to review and attest to ownership disclosure information maintained by the Authority as part of the revalidation process. The Authority believes this process meets the requirements of 42 CFR 455.104 and appropriately balances regulatory compliance with administrative efficiency. The Authority submitted its procedures to CMS on February 23, 2026, and requested clarification and guidance to ensure continued alignment with federal expectations. Providers not revalidated or deactivated by the five-year deadline The Authority’s revalidation backlog totaled 792 providers in July 2024. Through focused operational improvements and targeted resource deployment, the backlog was substantially reduced to three providers as of June 30, 2025. The Authority remains committed to continuous process improvement to sustain timely revalidations and prevent future backlog growth. As of March 2026, the Authority began working on a daily report of providers nearing the revalidation deadline so they can be prioritized and revalidated timely. Prior Findings: The conditions noted in this finding were previously reported in findings 2024-075, 2023-074, 2022-055, 2021-047, 2020-046, 2019-048, 2018-042, 2017-033, and 2016-035. Completion Date: Estimated March 2026 Agency Contact: Kari Summerour, CPA External Audit Compliance Manager (360) 725-9586 Kari.Summerour@hca.wa.gov

View Audit 395688

Finding 1200540 (2025-036)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Matching / Level of Effort / Earmarking Special Tests & Provisions

Finding Number: 2025-036 Finding: The Department of Children, Youth, and Families did not have adequate internal controls over and did not comply with health and safety requirements for the Child Care and Development Fund program. Program: 93.575 – Child Care and Development Block Grant 93.575 – COV...

Finding Number: 2025-036 Finding: The Department of Children, Youth, and Families did not have adequate internal controls over and did not comply with health and safety requirements for the Child Care and Development Fund program. Program: 93.575 – Child Care and Development Block Grant 93.575 – COVID-19 Child Care and Development Block Grant 93.596 – Child Care Mandatory and Matching Funds of the Child Care and Development Fund Compliance Requirement: Special Tests and Provisions – Health and Safety Requirements Questioned Costs: $0 Status: Corrective action in progress Corrective Action: The Department is strongly committed to ensuring the health, safety, and well-being of all children in care. During state fiscal year 2025, the Department: • Implemented improvements to the child care portal system (WA Compass) to enhance operational efficiency and to maintain accurate information on licensed child care and license-exempt staff and providers. • Established a new pre-licensing team to create an efficient and streamlined pathway for the initial licensure process, allowing licensors to remain focused on completing all required annual inspections. • Increased recruitment of licensing staff throughout the state. • Conducted internal reviews and research of the annual inspection checklists and recheck follow-up timelines to identify future adjustments to the inspection and recheck process as needed. • Established a plan to provide staff an annual informational audit presentation to promote understanding and collaboration on compliance issues. • Implemented data-driven decisions to assist providers and their staff to meet health and safety requirements. • Initiated the collaborative compliance initiative to prioritize compliance with all health and safety requirements which includes promoting collaboration, encouraging innovation, and focusing more on human-centered technical assistance. The Department will: • Work on updating policies and procedures to streamline and simplify recheck timelines and processes for items of noncompliance, including improvements in WA Compass. • Review the monitoring visit procedures to assess what additional steps could be added for management to improve oversight of rechecks. • Explore ways to demonstrate and adequately document the routine monitoring of licensed and license-exempt providers’ health and safety requirements to support compliance with quality assurance. • Provide training to field staff by the Quality Assurance and Continuous Quality Improvement team on the audit process and audit findings issued, and to gather input from field staff on any gaps or potential barriers to the recheck process. • Work with the Information Technology team to develop a report that will capture the task lists on the dashboard to include historical data and to improve documentation of monitoring compliance with license-exempt providers. Prior Findings: The conditions noted in this finding were previously reported in findings 2024-060, 2023-064, 2022-045, 2021-039, 2020-042, 2019-039, 2018-035, 2017-025, 2016-022, and 2015-024. Completion Date: Estimated June 2026 Agency Contact: Stefanie Niemela Audit Liaison (360) 725-4402 stefanie.niemela@dcyf.wa.gov

View Audit 395688

Finding 1200537 (2025-033)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Allowable Costs / Cost Principles Subrecipient Monitoring Matching / Level of Effort / Earmarking

Finding Number: 2025-033 Finding: The Department of Children, Youth, and Families did not have adequate internal controls over and did not comply with requirements to ensure payments to child care providers for the Child Care and Development Fund program were allowable and properly supported. Progra...

Finding Number: 2025-033 Finding: The Department of Children, Youth, and Families did not have adequate internal controls over and did not comply with requirements to ensure payments to child care providers for the Child Care and Development Fund program were allowable and properly supported. Program: 93.575 – Child Care and Development Block Grant 93.575 – COVID-19 Child Care and Development Block Grant 93.596 – Child Care Mandatory and Matching Funds of the Child Care and Development Fund Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Questioned Costs: $3,827 Status: Corrective action in progress Corrective Action: The Department agrees with the 11 audit exceptions identified by the State Auditor’s Office resulting from testing of attendance records and documentation from providers. In February 2026, the Department wrote overpayments for the exceptions identified and submitted them for recovery to the Department of Social and Health Services, Office of Financial Recovery. The Department will: • Develop a decision package to request funding for options to increase internal controls for provider payments. • Update the Child Care Subsidy Program Integrity Plan and the quality assurance audit procedures to align with current practices. When the Department of Health and Human Services (HHS) issues a management decision letter for the fiscal year 2025 finding, the Department will work with HHS and follow the audit resolution process. Prior Findings: The conditions noted in this finding were previously reported in findings 2024-056, 2023-058, 2022-041, 2021-033, 2020-038, 2019-035, 2018-034, 2017-024, 2016-021, 2015-023, 2014-023, 2013-016, 12-28, 11-23, 10-31, 9-12, and 8-13. Completion Date: Estimated October 2026 Agency Contact: Stefanie Niemela External Audit Liaison (360) 725-4402 stefanie.niemela@dcyf.wa.gov

View Audit 395688

Finding 1200509 (2025-020)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Student Financial Aid Subrecipient Monitoring Reporting

Finding Number: 2025-020 Finding: The University of Washington did not have adequate internal controls to ensure it notified the Department of Education of changes in student enrollment information accurately and in a timely manner for the Federal Pell Grant and Direct Student Loan programs. Program...

Finding Number: 2025-020 Finding: The University of Washington did not have adequate internal controls to ensure it notified the Department of Education of changes in student enrollment information accurately and in a timely manner for the Federal Pell Grant and Direct Student Loan programs. Program: 84.063 – Federal Pell Grant Program 84.268 – Federal Direct Student Loans Compliance Requirement: Special Tests and Provisions – NSLDS Reporting Questioned Costs: $0 Status: Corrective action in progress Corrective Action: To address the audit recommendations, the University will take the following actions to strengthen monitoring and audit of the National Student Loan Data System (NSLDS) and university records to ensure enrollment reporting is timely, accurate, and complete. • The Office of the University Registrar (OUR) will reinforce and refine its quarterly audit and reconciliation activities to compare NSLDS enrollment information with institutional records subsequent to National Student Clearinghouse (NSC) submissions. • OUR will document and report discrepancies and follow a designated escalation path for resolution. A documented supervisory review will be established to strengthen internal controls. • OUR will document all current and new enrollment reporting processes and ensure sufficient written procedures are provided to primary and backup staff to perform the functions effectively. • OUR will review NSLDS records and enrollment data for the audit period and ensure accurate reporting of enrollment status. • The University will establish a policy and procedure for the retention of source documentation provided to NSC. Prior Findings: None Completion Date: Estimated August 2026 Agency Contact: Erick Winger Controller (206) 543-5322 erickw@uw.edu

View Audit 395688

Finding 1191994 (2025-052)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Reporting Matching / Level of Effort / Earmarking

Finding Number: 2025-052 Finding: The Military Department did not have adequate internal controls over and did not comply with requirements to ensure it filed reports required by the Federal Funding Accountability and Transparency Act for the Fire Management Assistance Grant program. Program: 97.046...

Finding Number: 2025-052 Finding: The Military Department did not have adequate internal controls over and did not comply with requirements to ensure it filed reports required by the Federal Funding Accountability and Transparency Act for the Fire Management Assistance Grant program. Program: 97.046 – Fire Management Assistance Grant Compliance Requirement: Reporting Questioned Costs: $0 Status: Corrective action in progress Corrective Action: During the audit period, the Department experienced changes in data collection and reporting processes, increased workload demands, decentralization of staff, and employee turnover. As a result, data entry errors in the Federal Funding Accountability and Transparency Act (FFATA) reporting were more prevalent. The Department is implementing the following corrective actions: • Review and reinforce internal written procedures with grant management staff and leadership to ensure clarity of roles and reporting requirements. • Update the internal FFATA procedures to ensure all sub-awards and amendments are properly identified and reported. • Implement a supervisory review process requiring program staff to validate the accuracy and completeness of FFATA reports prior to submission deadlines. The Department is committed to strengthening internal controls and ensuring full compliance with FFATA reporting requirements. Management will continue to monitor reporting processes to ensure future submissions are accurate, complete, and timely. Prior Findings: None Completion Date: Estimated June 2026 Agency Contact: Melanie Rogers Deputy Finance Director (253) 512-7365 melanie.rogers@mil.wa.gov

View Audit 395688

Finding 1191992 (2025-050)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Reporting

Finding Number: 2025-050 Finding: The Health Care Authority did not have adequate internal controls over and did not comply with requirements to ensure it filed accurate and timely reports required by the Federal Funding Accountability and Transparency Act for the Block Grants for Community Mental H...

Finding Number: 2025-050 Finding: The Health Care Authority did not have adequate internal controls over and did not comply with requirements to ensure it filed accurate and timely reports required by the Federal Funding Accountability and Transparency Act for the Block Grants for Community Mental Health Services and Block Grants for Substance Use Prevention, Treatment, and Recovery Services programs. Program: 93.958 – Block Grants for Community Mental Health Services 93.958 – COVID-19 Block Grants for Community Mental Health Services 93.959 – Block Grants for Prevention and Treatment of Substance Abuse 93.959 – COVID-19 Block Grants for Prevention and Treatment of Substance Abuse Compliance Requirement: Reporting Questioned Costs: $0 Status: Corrective action in progress Corrective Action: The Authority concurs with the finding. The Authority submitted the reports that had not been filed and corrected the inaccurately filed reports. During fiscal year 2025, the Authority transitioned to a new state tracking system and a new federal reporting system. Several issues resulted from transitioning the reporting process to the new systems. To ensure reports are filed accurately in the future, the Authority is revising procedures and will provide training on updated procedures for staff involved in the reporting process. Prior Findings: The conditions noted in this finding were previously reported in findings 2024-083, 2023-086, 2022-069, 2022-065, and 2021-058. Completion Date: Estimated April 2026 Agency Contact: William Sogge, CPA, CIA External Audit Compliance Specialist (360) 725-5110 william.sogge@hca.wa.gov

View Audit 395688

Finding 1191973 (2025-038)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Allowable Costs / Cost Principles Questioned Costs Subrecipient Monitoring

Finding Number: 2025-038 Finding: The Department of Children, Youth, and Families did not have adequate internal controls to ensure payments to providers were allowable and properly supported for the Social Services Block grant. Program: 93.667 – Social Services Block Grant Compliance Requirement: A...

Finding Number: 2025-038 Finding: The Department of Children, Youth, and Families did not have adequate internal controls to ensure payments to providers were allowable and properly supported for the Social Services Block grant. Program: 93.667 – Social Services Block Grant Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Period of Performance Questioned Costs: $1,872,842 Status: Corrective action complete Corrective Action: The Department does not agree that expenditures were improperly charged to the Social Services Block Grant (SSBG) program during fiscal year 2025. Since November 2024, the Department has limited journal voucher (JV) activities and manually processed these transfer JVs at the transaction-level by grant funding sources. This action was taken in response to prior year’s audit concern that the SSBG program was not auditable without transaction-level data. The amount of questioned costs reported on this audit finding were based on the following JVs that were processed by the Department during the fiscal year: • $1,419,561 were grant level adjustments made for allowable activities per the SSBG expenditure plan. • $505,707 was a portion of an accrual JV that the Department processed during the 2025 state fiscal year close and represented an estimate of the amount the Department may spend within the allowable timeframe, not the actual amount charged to the grant. Accruals are estimated outstanding costs that are included as part of the state’s year end closing process. When the Department of Health and Human Services (HHS) issues a management decision letter for the fiscal year 2025 finding, the Department will work with HHS and follow the audit resolution process. Prior Findings: The conditions noted in this finding were previously reported in findings 2024-072 and 2023-070. Completion Date: February 2026 Agency Contact: Stefanie Niemela External Audit Liaison (360) 725-4402 stefanie.niemela@dcyf.wa.gov

View Audit 395688

Finding 1191971 (2025-037)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Allowable Costs / Cost Principles Matching / Level of Effort / Earmarking

Finding Number: 2025-037 Finding: The Department of Children, Youth, and Families did not have adequate internal controls over and did not comply with requirements to ensure Foster Care Maintenance payment rates were properly calculated. Program: 93.658 – Foster Care Title IV-E Compliance Requiremen...

Finding Number: 2025-037 Finding: The Department of Children, Youth, and Families did not have adequate internal controls over and did not comply with requirements to ensure Foster Care Maintenance payment rates were properly calculated. Program: 93.658 – Foster Care Title IV-E Compliance Requirement: Special Tests and Provisions – Payment Rate Setting and Application Questioned Costs: $0 Status: Corrective action in progress Corrective Action: The Department concurs that policies and procedures related to rate setting for Foster Care maintenance payments are not currently established and is committed to strengthening internal controls and complying with federal requirements. In February 2025, the Department met with the State Auditor’s Office to gather an understanding of concerns and discuss how reasonable and allowable rates could be documented to ensure federal compliance. In July 2025, the Department began drafting the written policies and procedures for setting payment rates to ensure maintenance payment rates only include allowable costs. The Department will continue to follow internal processes to complete the payment and rate setting policies and procedures. Prior Findings: The conditions noted in this finding were previously reported in finding 2024-071. Completion Date: Estimated July 2026 Agency Contact: Stefanie Niemela Audit Liaison (360) 725-4402 stefanie.niemela@dcyf.wa.gov

View Audit 395688

Finding 1191965 (2025-031)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Reporting

Finding Number: 2025-031 Finding: The Department of Commerce did not have adequate internal controls over and did not comply with requirements to ensure it filed reports required by the Federal Funding Accountability and Transparency Act. Program: 93.568 – Low-Income Home Energy Assistance Program C...

Finding Number: 2025-031 Finding: The Department of Commerce did not have adequate internal controls over and did not comply with requirements to ensure it filed reports required by the Federal Funding Accountability and Transparency Act. Program: 93.568 – Low-Income Home Energy Assistance Program Compliance Requirement: Reporting Questioned Costs: $0 Status: Corrective action complete Corrective Action: The Department updated procedures to improve the accuracy of the Federal Funding Accountability and Transparency Act (FFATA) reporting. To strengthen internal controls and ensure compliance with reporting requirements, the Department: • Established a process for program staff to send the FFATA report for Program Manager’s review prior to sending the report to the Managing Director or the Senior Weatherization Program and Evaluation Manager for review and approval. • Implemented a process to ensure each subaward or amendment is entered separately into the FFATA reporting system. • Required budget staff to conduct a secondary review of the prepared report to verify financial accuracy before submission in the FFATA reporting system by the Program Manager. • Developed a standard procedure for retaining completed reports and all other supporting documentation. The Department will continue to review the FFATA procedures annually to ensure compliance with current federal requirements. Prior Findings: The conditions noted in this finding were previously reported in finding 2024-052. Completion Date: Agency Contact: January 2026 Gena Allen Internal Control Officer (360) 480-5149 Gena.Allen@commerce.wa.gov

View Audit 395688

Finding 1191956 (2025-025)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Allowable Costs / Cost Principles Subrecipient Monitoring Questioned Costs

Finding Number: 2025-025 Finding: The Department of Children, Youth, and Families did not have adequate internal controls to ensure payments to child care providers paid with Temporary Assistance for Needy Families funds were allowable and properly supported. Program: 93.558 – Temporary Assistance f...

Finding Number: 2025-025 Finding: The Department of Children, Youth, and Families did not have adequate internal controls to ensure payments to child care providers paid with Temporary Assistance for Needy Families funds were allowable and properly supported. Program: 93.558 – Temporary Assistance for Needy Families Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Questioned Costs: $2,296 Status: Corrective action in progress Corrective Action: The Department agrees with the three audit exceptions identified by the State Auditor’s Office resulting from testing of attendance records and documentation from providers. In February 2026, the Department wrote overpayments for the exceptions identified and submitted them for recovery to the Department of Social and Health Services, Office of Financial Recovery. The Department will: • Develop a decision package to request funding for options to increase internal controls for provider payments. • Update the Child Care Subsidy Program Integrity Plan and quality assurance audit procedures to align with current practices When the Department of Health and Human Services (HHS) issues a management decision letter for the fiscal year 2025 finding, the Department will work with HHS and follow the audit resolution process. Prior Findings: The conditions noted in this finding were previously reported in findings 2024-042, 2023-051, 2022-035, and 2021-028. Completion Date: Estimated October 2026 Agency Contact: Stefanie Niemela External Audit Liaison (360) 725-4402 stefanie.niemela@dcyf.wa.gov

View Audit 395688

Finding 1191953 (2025-022)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Reporting Subrecipient Monitoring Allowable Costs / Cost Principles

Finding Number: 2025-022 Finding: The Department of Health did not have adequate internal controls over and did not comply with reporting requirements for the Epidemiology and Laboratory Capacity for Infectious Diseases and the Immunization Cooperative Agreements programs. Program: 93.268 – Immuniza...

Finding Number: 2025-022 Finding: The Department of Health did not have adequate internal controls over and did not comply with reporting requirements for the Epidemiology and Laboratory Capacity for Infectious Diseases and the Immunization Cooperative Agreements programs. Program: 93.268 – Immunization Cooperative Agreements 93.268 – COVID-19 Immunization Cooperative Agreements 93.323 – Epidemiology and Laboratory Capacity for Infectious Diseases 93.323 – COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases Compliance Requirement: Reporting Questioned Costs: $0 Status: Corrective action in progress Corrective Action: The Department will strengthen internal controls over the preparation and review of the SF-425 Federal Financial Reports for the Epidemiology and Laboratory Capacity for Infectious Diseases and Immunization Cooperative Agreements programs. The Department will: • Implement additional validation procedures to confirm that financial data used to prepare the reports is accurate and consistent with the Department’s accounting records. • Review grant coding and related chart of account structures used for financial reporting to reduce the risk of reporting errors. • Enhance procedures for preparing SF-425 reports to ensure that obligations, expenditures, and unobligated balances are reported in accordance with federal guidance. • Document management review performed to verify completeness and accuracy of information prior to report submission. Prior Findings: The conditions noted in this finding were previously reported in finding 2024-033. Completion Date: Estimated June 2027 Agency Contact: Jeff Arbuckle External Audit Manager (360) 701-0798 Jeff.Arbuckle@doh.wa.gov

View Audit 395688

Finding 1191856 (2025-015)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Allowable Costs / Cost Principles Internal Control / Segregation of Duties

Finding Number: 2025-015 Finding: The Housing Finance Commission did not have adequate internal controls over and did not comply with reporting requirements for the Homeowner Assistance Fund program. Program: 21.026 – COVID-19 Homeowner Assistance Fund Compliance Requirement: Reporting Questioned Co...

Finding Number: 2025-015 Finding: The Housing Finance Commission did not have adequate internal controls over and did not comply with reporting requirements for the Homeowner Assistance Fund program. Program: 21.026 – COVID-19 Homeowner Assistance Fund Compliance Requirement: Reporting Questioned Costs: $0 Status: Corrective action complete Corrective Action: To address the deficiencies identified by the auditors in prior years’ findings, the Commission has strengthened internal controls in completing annual performance reports for the Homeowner Assistance Fund program. The Commission has refined its management review process and updated procedures to require additional review and approval by Finance Division management prior to submitting the annual report. This will be evidenced with submission of the federal fiscal year 2026 report. Prior Findings: The conditions noted in this finding were previously reported in findings 2024-017 and 2023-025. Completion Date: November 2025 Agency Contact: Lucas Loranger Senior Finance Director (206) 464-7139 Lucas.Loranger@wshfc.org

View Audit 395688

Finding 1191853 (2025-012)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Eligibility Special Tests & Provisions

Finding Number: 2025-012 Finding: The Employment Security Department did not have adequate internal controls over and did not comply with requirements to ensure it profiled all claimants under the Unemployment Insurance program to identify people likely to need reemployment services and ensure repor...

Finding Number: 2025-012 Finding: The Employment Security Department did not have adequate internal controls over and did not comply with requirements to ensure it profiled all claimants under the Unemployment Insurance program to identify people likely to need reemployment services and ensure reports are reviewed before submission to the federal government. Program: 17.225 – Unemployment Insurance Compliance Requirement: Special Tests and Provisions – UI Reemployment Programs: Worker Profiling and Reemployment Services (WPRS) and Reemployment Services and Eligibility Assessments Questioned Costs: $0 Status: Corrective action in progress Corrective Action: In response to the finding and recommendations, the Department has taken the following actions: • In December 2025, reviewed the design of the Unemployment Tax and Benefits (UTAB) calculation and risk profile score and performed testing on its accuracy. • In January 2026: o Implemented additional internal controls to ensure claimants are profiled and prioritized for reemployment services based on their risk of exhausting unemployment benefits, in accordance with federal requirements. o Provided additional guidance to staff to ensure quarterly Employment and Training Administration (ETA) reports are completed accurately and submitted timely in accordance with ETA procedures. o Implemented a process to improve oversight in the reporting procedures to include adequate review and approval before submission to the grantor, and the proper retention of filed reports. The Department continues work to fully staff the unit and is working with the federal grantor and state partners regarding training and guidance on new accounting and reporting system changes. The Department partially concurs with the recommendation to reconcile the UTAB and Reemployment Appointment Scheduler (RAS) interface. There is currently a process in place to notify the RAS team if a record fails at the time of data transmission between UTAB and RAS. The Department is working on prioritizing resources to review the processes to verify that the complete UTAB exit file was successfully received by RAS. This work is anticipated to be completed in June 2026. Prior Findings: The conditions noted in this finding were previously reported in findings 2024-009 and 2023-010. Completion Date: Estimated June 2026 Agency Contact: Joshua Summers External Audit Manager (360) 529-6718 Joshua.Summers@esd.wa.gov

View Audit 395688

Finding 1191852 (2025-011)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Questioned Costs Allowable Costs / Cost Principles

Finding Number: 2025-011 Finding: The Employment Security Department did not have adequate internal controls over the 2208A reporting requirements for the Unemployment Insurance program. Program: 17.225 – Unemployment Insurance Compliance Requirement: Reporting Questioned Costs: $0 Status: Correctiv...

Finding Number: 2025-011 Finding: The Employment Security Department did not have adequate internal controls over the 2208A reporting requirements for the Unemployment Insurance program. Program: 17.225 – Unemployment Insurance Compliance Requirement: Reporting Questioned Costs: $0 Status: Corrective action complete Corrective Action: The Department notified our federal grantor when we became aware of the issue and submitted corrected reports for the periods in question. To improve internal controls, the Department: • Updated internal processes for reviewing reports and retaining all supporting documentation. • Implemented a new process to run a cumulative report to provide additional backup and to detect variances throughout the fiscal year. Prior Findings: None Completion Date: December 2025 Agency Contact: Joshua Summers External Audit Manager (360) 529-6718 Joshua.Summers@esd.wa.gov

View Audit 395688

Finding 1191849 (2025-009)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Reporting Internal Control / Segregation of Duties Subrecipient Monitoring

Finding Number: 2025-009 Finding: The Department of Social and Health Services did not have adequate internal controls over financial reporting for the Summer Electronic Benefits Transfer Program for Children. Program: 10.646 – Summer Electronic Benefits Transfer Program for Children Compliance Requ...

Finding Number: 2025-009 Finding: The Department of Social and Health Services did not have adequate internal controls over financial reporting for the Summer Electronic Benefits Transfer Program for Children. Program: 10.646 – Summer Electronic Benefits Transfer Program for Children Compliance Requirement: Reporting Questioned Costs: $0 Status: Corrective action in progress Corrective Action: The Department concurs with the finding. For the two reports that the auditors determined lacked secondary review and approval, the Department maintains that both instances were anomalies that occurred during a staffing transition within the Division of Finance and Financial Resources. The reports were complete, accurate, and submitted timely. To strengthen internal controls over financial reporting, the Department will: • Update federal reporting procedures to designate a backup reviewer and approver. • Communicate the expectations in the updated procedures and provide training to the designated backup reviewer and approver. Prior Findings: None Completion Date: Estimated April 2026 Agency Contact: Richard Meyer External Audit Compliance Manager Richard.Meyer@dshs.wa.gov

View Audit 395688

Finding 1191838 (2025-001)

Material Weakness 2025

The Housing Authority of the County of Kern

CA

HUD Housing Programs Reporting

FA-2025-001 Moving to Work Demonstration Program, United States Department of Housing and Urban Development, Federal Assistance listing number #14.881. Management’s Response/Planned Corrective Action: The Authority acknowledges the finding related to untimely and incomplete Housing Quality Standards...

FA-2025-001 Moving to Work Demonstration Program, United States Department of Housing and Urban Development, Federal Assistance listing number #14.881. Management’s Response/Planned Corrective Action: The Authority acknowledges the finding related to untimely and incomplete Housing Quality Standards (HQS) inspections under the Moving to Work Demonstration Program (Assistance Listing #14.881). To correct the deficiencies noted and ensure full alignment with HUD regulatory requirements, the Authority has undertaken the following corrective actions: 1. Immediate Staffing Intervention and Backlog Elimination: To address the substantial number of past-due inspections, the Authority hired two temporary inspectors dedicated exclusively to completing all overdue HQS inspections. This focused initiative was active from June 2025 through December 2025 and successfully brought delinquent inspections current. 2. Establishment of Permanent Oversight Structure: In December 2025, the Authority hired a full-time Lead Inspector to oversee all aspects of the HQS process. This position is responsible for: o Ensuring compliance with 24 CFR §§ 982.401–982.405 o Implementing quality control measures o Monitoring inspection timeliness o Supervising inspection staff and coordinating workload assignments o Ensuring that internal policies fully align with HUD requirements, including correction of Administrative Plan Section 7A 3. Implementation of Bi-Weekly Internal Compliance Audits: To ensure ongoing adherence to HQS requirements, the Authority has instituted bi-weekly internal audits. Under this process: o A program administrator reviews a sample of completed HQS inspections o Timeliness, accuracy, documentation, and system entries are verified o Any identified deficiencies are corrected immediately and used for staff retraining 4. Ongoing Training and Compliance Reinforcement: All inspection staff have received updated training on HQS requirements, inspection timelines, documentation standards, and the Administrative Plan. Additional refresher training will be conducted at least annually or whenever regulatory guidance is updated. Anticipated Completion Date: All corrective actions described above have already been implemented or are currently in the final stages of implementation. Responsible Officials • Housing Administrator over Voucher Programs – Oversight of HQS compliance and policy revision • Lead Inspector (HQS) – Daily operational management of inspections • Assistant Executive Director – Monitoring of audit controls and QA reviews

View Audit 395651

Finding 1191837 (2025-002)

Material Weakness 2025

Brown County Community Unit School District #1

IL

Internal Control / Segregation of Duties Cash Management Reporting

Condition: The same individual is responsible for preparing and submitting monthly reimbursement claims for the Child Nutrition Program without an independent review or approval prior to submission. Plan: In order to rectify the finding related to the reporting of the meal claims, Brown County CUSD ...

Condition: The same individual is responsible for preparing and submitting monthly reimbursement claims for the Child Nutrition Program without an independent review or approval prior to submission. Plan: In order to rectify the finding related to the reporting of the meal claims, Brown County CUSD #1 will provide an independent review of the Accuclaim records and the meal claim with a signature indicating approval. The person best suited to provide an approval signature is the superintendent of the district. Management Response: The superintendent agrees with the finding and will perform and document the review as stated in the corrective action plan.

View Audit 395649

Finding 1191826 (2025-006)

Material Weakness 2025

Lincoln University

MO

Student Financial Aid Questioned Costs Reporting

The University acknowledges the audit finding regarding the reporting of undergraduate tuition and fees on the Fiscal Operations Report and Application to Participate (FISAP). We appreciate the auditors' review and agree that the amounts reported did not align with the institution's underlying recor...

The University acknowledges the audit finding regarding the reporting of undergraduate tuition and fees on the Fiscal Operations Report and Application to Participate (FISAP). We appreciate the auditors' review and agree that the amounts reported did not align with the institution's underlying records due to the use of net tuition and fee data that included both undergraduate and graduate/professional activity. To address the findings, Lincoln has implemented the following corrective measures: - Procedures have been updated to ensure that only gross undergraduate tuition and fee data-consistent with FISAP reporting requirements will be used in future submissions. - Financial Aid and Finance staff will jointly review the FSAP instructions and clarify the data elements required for accurate reporting. - A cross-departmental reconciliation step between Financial Aid and Finance prior to FISAP submission. - Documentation of data sources and validation steps to ensure consistency with underlying financial records. The corrective measures above are designed to ensure amounts reported for tuition and fees on the FISAP align with the institution's underlying records.

View Audit 395639

Finding 1191820 (2025-003)

Material Weakness 2025

Lincoln University

MO

Questioned Costs Student Financial Aid Reporting

The Office of Student Financial Services acknowledges the findings related to Reporting: Financial Reporting through the Common Origination and Disbursement (COD) System. We recognize the importance of accurate and timely reporting of origination data to ensure compliance with federal Pell Grant and...

The Office of Student Financial Services acknowledges the findings related to Reporting: Financial Reporting through the Common Origination and Disbursement (COD) System. We recognize the importance of accurate and timely reporting of origination data to ensure compliance with federal Pell Grant and Direct Loan requirements. The Office of Student Financial Services will implement additional controls to ensure accuracy of origination and disbursement reporting to COD. Prior to submission, staff will review enrollment dates, academic year dates, and disbursement dates against the academic calendar and student records in Colleague. A second-level review will be performed for a sample of records each term. Written procedures will be updated to document required verification steps before transmitting data to COD. Training will be provided to staff responsible for COD processing. These actions are intended to correct the issues contributing to this repeat finding, strengthen reporting accuracy, and ensure continued compliance with COD reporting requirements.

View Audit 395639

Finding 1191809 (2025-002)

Material Weakness 2025

Government of Puerto Rico Department of Corrections and Rehabilitation

PR

Subrecipient Monitoring Allowable Costs / Cost Principles Matching / Level of Effort / Earmarking

The DCR's management acknowledged the delay in preparing and retaining OP-15 documentation and stated that the Department's immediate priority was to ensure that employees received their authorized salary increases in a timely manner. To address this priority, management updated the internal payroll...

The DCR's management acknowledged the delay in preparing and retaining OP-15 documentation and stated that the Department's immediate priority was to ensure that employees received their authorized salary increases in a timely manner. To address this priority, management updated the internal payroll database by developing an electronic listing of affected employees and implementing approved salary changes directly within the system. Management indicated that this approach ensured that employees were compensated in accordance with approved salary adjustments, although the supporting documentation in personnel files lagged behind. Management further indicated that corrective efforts are currently underway to address a more recent, similar personnel action involving fewer than 50 employees and that, upon completion, the Department intends to proceed with preparing the OP-15 forms related to the broader population of over 4,000 employees. Management expects to complete the preparation and filing of the outstanding OP-15 documentation prior to the end of fiscal year 2026.

View Audit 395624

Corrective Action Plans

Filters