Corrective Action Plans

As of August 2025, we transferred all FFATA reporting duties to the Director of Operations and Systems. The Director of Operations and Systems hired a staff member in January 2026 to assist with FFATA reporting. All FFATA reporting moved from USA Spending to SAM.gov during fiscal year 2025. The migration to SAM.gov caused delays as a result of the account setup process that were out of our control, but we anticipate being current on all FFATA reporting by June 30, 2026.

Planned Corrective Action Plan: The District will ensure all supporting documentation is prepared and ready for Auditors. In addition, audit services will be procured with sufficient time to submit the single audit by the required timeline. Anticipated Completion Date: June 30, 2026 Responsible Contact Person: Lorna Villaruel, Business Manager

The Charter School will require the Food Service

Management Company (FSMC) to provide a current SOC 1 Type II Report in accordance with the bid and contract requirements. Written notification will be sent to the FSMC requesting the report within a specified timeframe.

Finding ref number: 2025-001 Finding caption: The District did not have adequate internal controls and did not comply with federal suspension and debarment requirements. Name, address, and telephone of District contact person: Jaime Matisons, Food Service Manager, 900 Cleveland, Aberdeen, WA. 98520 (360) 538-2256 Corrective action the auditee plans to take in response to the finding: (If the auditee does not concur with the finding, the auditee must list the reasons for non-concurrence). The cooperative provides all bid documents for the district representatives to review, this included suspension and debarment documentation. After review at a meeting of the cooperative membership, the members vote on accepting the bid. The cooperative keeps all documentation on file for review of the auditors. Documentation of this was provided to the auditor. Anticipated date to complete the corrective action: April 2026

Ocosta School District No. 172 September 1, 2024 through August 31, 2025 This schedule presents the corrective action planned by the District for findings reported in this report in accordance with Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Finding ref number: 2025-01 Finding caption: The District did not have adequate internal controls and did not comply with federal suspension and debarment requirements. Name, address, and telephone of District contact person: Robert Butler 2580 S. Montesano St. Westport, WA 98595 360.268.9125 ext. 1004 Corrective action the auditee plans to take in response to the finding: The District acknowledges the finding and appreciates the opportunity to strengthen our documentation practices related to suspension and debarment verification. We would like to clarify that the District did perform suspension and debarment checks through SAM.gov for the vendors in question on an annual basis. While these procedures were consistently completed, the District did not retain independent documentation of those checks. The District relied on SAM.gov as the authoritative federal system of record, including its historical tracking and notification features, rather than maintaining locally stored or printed copies. At the time, staff were not aware that compliance requirements required retention of documentation evidencing these checks. As a result, this finding reflects a documentation deficiency rather than the absence of the control itself. As confirmed during the audit, all vendors tested were in good standing and not suspended or debarred. Therefore, the District was not at risk of contracting with an ineligible vendor, and no questioned costs were identified.

Person responsible for the corrective action: Jim Larson-Shidler, Interim Superintendent/CFO and Cindy Szuminski, Finance Manager Corrective action planned: Actions taken to avoid future late claims include: • The district has added another authorized Level 3 person who can approve meal reimbursement requests in July 2025. This provides the district a backup approver if one is not available. • A recurring monthly task reminding authorized Level 3 approvers to certify the SNP claim has been set up in our Outlook calendars. Anticipated completion date: July 16, 2025

FINDING 2025-004 – FINANCIAL REPORTING-DEPARTMENT OF AGRICULTURE-NATIONAL SCHOOL LUNCH PROGRAM - CFDA 10.555-SCHOOL BREAKFAST PROGRAM - CFDA 10.553-CONDITION: The School District did not make the necessary monthly adjustments to the Cafeteria Fund general ledger to properly reconcile all of the balance sheet, revenue, and expense accounts to the underlying supporting documentation on hand at the School District. Accordingly, the financial position and results of operations for the Cafeteria Fund were stated incorrectly during the 2024-2025 fiscal year. This is a repeat finding (2024-003) from the previous fiscal year.CRITERIA: Prudent internal control over accounting for federal program funds requires non-federal organizations such as the School District to maintain financial records which account for federal funds in such a manner as to be able to properly track the receipt and use of federal funds as stated in Section 2 CFR Part 200 of the Uniform Guidance.RECOMMENDATION: I am recommending that the management of the School District establish written procedures for all accounting functions, but most notably for the function of making the necessary adjustments to the School District’s Cafeteria Fund general ledger in order to properly present the financial position and results of operations of this Fund over the course of the fiscal year. Consideration should be given to either performing this process in-house based on available manpower or contracted to a third-party accounting Firm quarterly or annually independent of the audit process. Management needs to ensure the performance of these procedures monthly in order to ensure its compliance with Section 2 CFR Part 200 of the Uniform Guidance.MANAGEMENT’S CORRECTIVE ACTION PLAN: District management is reviewing its current system of processing the transactions for the Cafeteria Fund to ensure that all necessary adjustments are made on a monthly basis to the balance sheet, revenue, and expense accounts in order for them to properly reflect the financial position and results of operations of this Fund during the course of the fiscal year. The timeframe for completion of this review will occur during the last four months of the 2025-2026 fiscal year to enable the School District to comply with the recordkeeping requirements for federal funds as specified in 2 CFR Part 200 of the Uniform Guidance.

Finding Number: 2025-004 It is recommended that that district review the design of its internal control over compliance to ensure the documentation requirements are incorporated into the control design. Response: To enhance internal controls to ensure the segregation of duties, the Assistant Director of Food Services will be responsible for the initial preparation and completion of all the claims. Subsequently, a secondary review and approvable will be preformed by either the Director or the Chief School Business Official (CSBO) prior to submission.

The District will strengthen its internal control system to ensure that each entry within the Nutrition Services data management system meets required program criteria and is fully supported by appropriate documentation. A more robust process of review and verification will be implemented to safeguard the integrity of originating data and prevent compromise. System access controls will also be reinforced to ensure that granted access is appropriate and used in accordance with established protocols. Ensuring the accuracy of meal data will support accurate revenue reporting and, in turn, reliable financial reporting. Moreover, the District will continue to foster a culture of integrity in which all allegations of fraud are taken seriously and addressed promptly. The District will also enhance the visibility and accessibility of its WeTip reporting system to ensure employees, students, and community members can report concerns.

The School will prepare and submit a plan to the state agency to address excess net cash resources in the nonprofit food service account. Management will implement procedures to monitor net cash resources on a periodic basis, including timely preparation and review of the food service program’s statement of financial performance, to ensure compliance with program requirements and timely completion of any required follow-up actions.

The District plans to design and implement a formal month-end reconciliation and claim certification process that includes: matching food service vendor meal counts to internal District records, dual review and approval, timely corrections, training and cross-training, and monitoring.

Planned Corrective Action: To address the audit findings related to meal applications within the Child Nutrition Department, the Child Nutrition Director has taken immediate and corrective action to strengthen our processes and ensure full compliance with program requirements. The director attended formal verification training and successfully completed the accompanying quiz to confirm her understanding of proper procedures. Additionally, the director developed a meal application checklist to ensure that all required information is accurately reviewed and documented before approval. To improve timeliness and accountability, the director has implemented the use of a date-received stamp on all applications so they can be processed within required timelines. These steps will help ensure greater accuracy, consistency, and compliance moving forward. The administration office has also stepped in to double check all applications as the Child Nutrition Director completes them. Each application will be reviewed again in the central office to help prevent incomplete or inaccurate paperwork.

Finding 2025-11 Name of Contact Person: Dena Howell, Finance Officer Corrective Action Plan: Management intends to implement controls to ensure the Child Nutrition program is not charged indirect costs in excess of the allowable limit. Proposed Completion Date: As soon as possible.

Recommendation: We recommend the District establish a procedure for timely review and approval of claims prior to their submission for reimbursement by someone who is knowledgeable of the grant requirements. Additionally, we recommend the district designate an individual to review eligibility and verification determinations for accuracy and proper input into software. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action planned/taken in response to finding: The Food Service Director will review eligibility and verification determinations for accuracy and proper input into the software. The District will continue to improve on reviewing and approval of claims. Name of the contact person responsible for correction action: Jessica Holtz Planned completion date for corrective action: June 30, 2026

Management's Response: The School District recognizes that the limited number of staff adds to the risk associated with the daily operations. To mitigate this risk, the Business Manager has to take an active role in the day-to-day operations of the Business Unit. She actively reviews all reconciliations and receipts to ensure they are posted to the accounting system properly. In addition, she approves all check disbursements and is reviewing the general ledger on a consistent basis.

1. Prior to final submission of the monthly claim to ISBE, staff will: o Print off each page of the ISBE claim entry. o Compare the printed claim data to the original backup documentation (meal counts, reimbursement worksheets, etc.). o Verify that all numbers align with the supporting records. 2. Any discrepancies found during this review will be corrected in the ISBE system before final submission.

The District will review their processes and procedures for reimbursement claims. In addition, there will be a manager level review of claims for reasonableness.

FINDING 2025-002 Finding Subject: Contact Person Responsible for Corrective Action: Tracey Haas, Business Manager Contact Phone Number and Email Address: 219-873-2000 x 8346 thaas@mcas.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: We will implement a system of internal controls to ensure that the Form 9 and all underlying expenditures are properly documented. Anticipated Completion Date: We anticipate that this correction will be in place by July 2027

Recommendation We recommend the District implement documented daily edit checks reconciling meal counts to attendance records and maintain records of this review. For food inventory, the District should establish a formal inventory system, including perpetual inventory records, monthly physical counts, and supervisory review. Staff involved in Child Nutrition operations should receive training on USDA and federal compliance requirements Management Response Corrective Action The Food Service Director will implement the federally required daily edit check process. This will include comparing daily meal counts against the attendance and enrollment figures to ensure that claims do not exceed the number of students present. Any discrepancies identified during this process will be investigated and documented prior to submission of the monthly claim. The District will also change the tracking of meals served by using an official meal tracking device or by having students use their badge/ID cards to get a more accurate meal count each day. The District has a formal inventory process for all food service supplies including canned goods, dry goods, and freezer items. This system tracks items from receipt through consumption. The District conducts monthly physical inventory counts of all food service assets. These counts are reconciled and any significant variances are reviewed by the Food Service Director and reported to the Business Manager. The District will ensure that all nutrition staff is trained on these procedures as well. Due Date of Completion: June 30, 2026 Responsible Party Business Manager, Food Service Director

The auditor has confirmed in the ACFR that we have worked with the software provider and identified the issue with the edit check worksheets not correctly reporting meals on a daily basis. The software has been adjusted.

We have followed up with PaySchools and they have a target date of 4/30/26 for release of SOC Type II report, which should provide documentation on the effectiveness of their controls upon which we can rely when it comes to using their automated free and reduced application processing. In the meantime, our Food Service Supervisor will be reviewing all applications retroactive to the beginning of 2025-26.

Finding 2025-003 Federal Agency Name: U.S. Department of Agriculture Program Name and FALN # : Child Nutrition Cluster Federal Financial Assistance Listing #10.555 National School Lunch Program Federal Financial Assistance Listing #10.553 School Breakfast Program Finding Summary: The Region Schools do not have an internal control system designed to retain the appropriate review documentation for each meal count reported to the State of Iowa for reimbursement. Responsible Individuals: Bryan Jordan, Controller Corrective Action Plan: The Region Schools will retain a documented review of meal counts at each location completed prior to submission of the reports to the State of Iowa. Anticipated Completion Date: Fiscal year ended June 30, 2026

Finding 2025-002 Federal Agency Name: U.S. Department of Agriculture Program Name and FALN # : Child Nutrition Cluster Federal Financial Assistance Listing #10.555 National School Lunch Program Federal Financial Assistance Listing #10.553 School Breakfast Program Finding Summary: The Region Schools do not have an internal control system designed to retain the appropriate review documentation related to student eligibility within the student file. Responsible Individuals: Bryan Jordan, Controller Corrective Action Plan: The Region Schools will retain documentation related to the review of eligibility of the students participating in the Program within the student file going forward. Anticipated Completion Date: Fiscal year ended June 30, 2026

Finding 2025-001 Federal Agency Name: U.S. Department of Agriculture Program Name and FALN # : Child Nutrition Cluster Federal Financial Assistance Listing #10.555 National School Lunch Program Federal Financial Assistance Listing #10.553 School Breakfast Program Finding Summary: The Region Schools do not have an internal control system designed to retain the appropriate documentation related to direct certification from the State of Iowa (State). Responsible Individuals: Bryan Jordan, Controller Corrective Action Plan: The Region Schools will retain all Direct Certification information within the file for the students eligible to participate in the program going forward. Anticipated Completion Date: Fiscal year ended June 30, 2026