Corrective Action Plans

FINDING 2023-002 Finding Subject: COVID‐19 ‐ Coronavirus State and Local Fiscal Recovery Funds ‐ Reporting Summary of Finding: The Elkhart County Health Department (Health Department) was awarded the Health Issues and Challenges Grant through the Indiana Department of Health (IDOH) financed through the Coronavirus State and Local Fiscal Recovery Funds The grant was funded through the American Rescue Plan Act that focused on the improvement of chronic disease, and more specifically, elevated blood lead level reduction. The Health Department was required to submit data through the online portal, National Electronic Disease Surveillance System (NEDSS) Base System (NBS) each month. The submitted data included program specific metrics related to patient case management of certified Elevated Blood Lead Levels (EBLLs). A Case Manager managed all aspects of an individual patient's care. A home visit and two assessments were completed by the Case Manager and input into the NBS. Once these steps were marked as complete in the NBS, the Clinical Manager reviewed each case and compiled data along with the cost reimbursement amount into a spreadsheet. The Clinical Manager provided the spreadsheet to the Manager of Administration who then completed and submitted the reimbursement invoice to the IDOH. The reimbursement invoice was submitted without a documented oversight, review, or approval process to ensure the accuracy of the data prior to submission. Beginning in October 2022, the Health Department was required to submit program specific metrics and work plan data through RedCap software on a quarterly basis. The Case Manager was responsible for tracking and compiling the necessary information for the quarterly reports. Of the four reports tested, two reports were submitted late. In addition, the quarterly reports were submitted by the Case Manager via the RedCap software without a documented oversight, review, or approval process to ensure timely submission. Recommendation: We recommend the Health Department implement a formal oversight and review process for all data submissions to ensure accuracy and completeness before they are submitted to Indiana Department of Health (IDOH). This would involve a secondary review by a designated individual or team to verify the data. Additionally, improving workflow coordination through clearly defined roles and responsibilities for each team member would help streamline the process and prevent delays. To further improve timeliness, the Health Department should implement a tracking and reminder system for report due dates and reimbursement deadlines to ensure timely submissions. Providing staff with thorough training on reporting protocols and maintaining detailed documentation will help ensure consistent adherence to procedures. Finally, establishing accountability measures through clear roles, deadlines, and regular audits would enhance the efficiency and effectiveness of the reporting process. These steps will help ensure the Health Department meets grant requirements, maintains data accuracy, and avoids potential delays or issues in future submissions. INDIANA STATE BOARD OF ACCOUNTS 29 Contact Person Responsible for Corrective Action: Concetta Sanfilippo Contact Phone Number and Email Address: 574.523.2101 csanfilippo@elkhartcounty.com Views of Responsible Officials: We concur with the finding Description of Corrective Action Plan: During the prior audit we were informed of the deficiencies in our controls over the reimbursement requests submitted to the Department of Health. Unfortunately, due to the timing of the finding being brought to our attention near the end of its lifecycle we were unable to implement controls. With only one month remaining between the audit finding results and the grant’s end date, implementing the stated corrective action plan was deemed impractical. The Elkhart County Health Department has internal controls and policies for the grants that are received. This grant was very different from the other grants we have received in the past. Since the Elevated Blood Lead Level Reduction grant differed significantly from previous grants received by the Elkhart County Health Department, moving forward, if the department chooses to pursue and secure another grant with a similar scope, enhanced controls and policies will be implemented to strengthen accuracy and accountability. Specifically, the Health Department will establish a formal data review process. All data submissions will undergo an initial review, followed by a secondary verification conducted by a designated staff member. This dual review procedure will apply to all future grants of a similar nature to ensure the integrity and reliability of submitted information. The goal is to ensure there is an appropriate system of checks and balances, as well as a remediation/correction step, in place for all tasks and documentation related to grant-funded duties and invoicing. Anticipated Completion Date: Effective June 30, 2025 the Elkhart County Department of Health will implement this practice for all newly accepted grants similar in scope to the Elevated Blood Lead Level Reduction.

Finding 2023-007: Significant Deficiency - Reporting Condition: Annual ACF-696T reports were not reviewed by someone other than the preparer of the reports. Corrective Action: The Club agrees with this finding and will establish a review process in their policy and procedures to ensure that someone other than the person preparing the report reviews the annual ACF-696T reports before submitting them to ensure accurate reporting. Person Responsible For Corrective Action: Rhonica Via, Finance Director Anticipated Completion Date: June 30, 2025

Finding 2023-008: Significant Deficiency - Special Tests and Provisions Condition: While documentation exists that a background investigation was completed, no documentation was maintained that the results of the background investigation were compared to the employment application or that a suitability determination was conducted by an appropriate adjudicating official who herself/himself was the subject of a favorable background investigation. Corrective Action: The Club and Cherokee Central Schools (CCS) agree with this finding and CCS notes that its Employment Suitability Investigations policy was updated and formally adopted on July 22, 2019. The audit included a sample of employee files from prior years, before the policy was implemented and before consistent personnel changes were made. Since the policy's adoption, appropriate procedures have been put in place to ensure background investigations and employment suitability assessments are conducted and properly documented. CCS will continue to monitor compliance with the policy and ensure that documentation is consistently maintained in employee personnel files moving forward. Current updates to be enacted immediately include documentation that the Superintendent has reviewed the files. Person Responsible For Corrective Action: Heather Driver, Interim CCS HR Director Anticipated Completion Date: June 30, 2024

2023‐007 Allowable Costs and Allowable Activities - COVID‐19 Coronavirus State and Local Fiscal Recovery Funds Person responsible for corrective action – Devlyn Brooks, Executive Director Corrective action planned – Management is working within the invoice approval system to build in safeguards to prevent invoices from being routed without CEO approval. Planned implementation date of corrective action – Calendar year 2025.

U.S. DEPARTMENT OF COMMERCE 2023-003 COVID 19 – Coronavirus State and Local Fiscal Recovery Funds (Federal Assistance Listing Number 21.027) Recommendation: To ensure compliance, we recommend strengthening of internal control by training multiple staff how to complete vendor checks required by the Uniform Guidance. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action planned/taken in response to finding: The vendor status was not properly checked due to staff oversight and unfamiliarity with compliance requirements. The City has educated staff entering contracts that will use grant funding on the importance of checking for suspended or debarred status before engaging. Training of staff on procedures to check suspended or debarred status will also be implemented. Name of the contact person responsible for corrective action: Kyle Cratty, Finance Director Planned completion date for corrective action plan: On-going

Audit Finding Reference: 2023-001 Planned Corrective Action: The district created a Federal and State Grants Procedures Manual that includes specific procedures for Time and Effort. The Grant Procedure Manual was approved by the District Committee on December 12, 2023. Name of Contact Person: Melissa Martel, Director of Finance Completion Date: December 12, 2023

January 16, 2025 The Town of Vinton respectfully submits the following corrective action plan for the year ending June 30, 2023. Name and address of independent public accounting firm: Brown, Edwards & Company, L.L.P. 3906 Electric Road Roanoke, VA 24018 Audit period: June 30, 2023 The findings from the June 30, 2023, Schedule of Findings and Questioned Costs (the “Schedule”) are discussed below. The findings are numbered consistently with the number assigned in the Schedule. FINDINGS – FINANCIAL STATEMENT AUDIT 2023-001: Audit Adjustments (Material Weakness) Condition: During the audit, we noted that several year-end audit adjustments were required to ensure that the financials were prepared in accordance with accounting principles generally accepted in the United States of America. The adjustments were related to debt, accounts receivable, and capital assets. Criteria: Audit adjustments were required to correct balances in order for the financial statements to be presented in accordance with accounting principles generally accepted in the United States of America. Cause: With regard to governmental activity long-term debt, it appears that the roll forward was not reviewed before year-end entries were made, resulting in additional adjustments to long-term debt balances. With regard to business-type activities' long-term debt, principal payments were recorded as an expense rather than a reduction to long-term debt, resulting in additional adjustments to these accounts. With regard to governmental activities and business-type activities' accrued interest, amortization schedules were not reviewed before entries were made, resulting in additional adjustments to these accounts. With regard to governmental activities and business-type activities capital assets, roll forwards, and depreciation schedules were not reviewed before entries were made, resulting in additional adjustments. With regard to governmental activities receivables and deferred revenue were not correctly captured and recorded at year end. FINDINGS – FINANCIAL STATEMENT AUDIT (CONTINUED) 2023-001: Audit Adjustments (Material Weakness) (Continued) Effect: There is an increased risk of financial statement misstatement Recommendation: We recommend establishing procedures in which qualified supervisors are reviewing year-end work papers that feed into the final general ledger and focus on the accuracy of year-end balances. Planned Corrective Action: Management has noted the opportunities for improvement in the review process and segregated duties as it pertains to audit preparation. The department continues to work on separating duties between the Assistant Finance Director and (Senior) Financial Administrators, who will complete the working papers. The Finance Director/Treasurer will then review them for correctness. In addition, the team will work to link the documents to reduce the adjustments of the final documents. 2023-002: Segregation of Duties (Material Weakness) Condition: A fundamental concept of internal controls is the separation of duties. No one employee should have access to both physical assets and the related accounting records, or to all phases of a transaction. A proper segregation of duties has not been established in functions related to accounts payable, accounts receivable, cash disbursements, and information technology. Criteria: • Mail should be opened by an employee not responsible for accounting, such as the Town Clerk. Cash receipts could be recorded and the deposit prepared by this person. The cash receipts journal, supplemented by remittance advice, could be forwarded to the accounting staff for postings to the general ledger and detailed customer accounts. • Customer complaints, returned checks, disputed items, and other such matters should be investigated by someone who is independent of preparing daily cash receipts and deposits. • Checks and remittance advice should be placed into envelopes and mailed by someone with no other accounting responsibilities. • Water and sewer billing should be independent of the accounts receivable function. Cause: The size of the Town’s accounting staff prohibits complete adherence to segregation of duties. Effect: Internal controls are designed to safeguard assets and detect losses from employee dishonesty or error. FINDINGS – FINANCIAL STATEMENT AUDIT (CONTINUED) 2023-002: Segregation of Duties (Material Weakness) (Continued) Recommendation: Steps should be taken to eliminate the performance of conflicting duties where possible or to implement effective compensating controls. Planned Corrective Action: Management noted this finding. The Finance Director has segregated duties, to the extent practical, to minimize instances where the same person has complete control of a transaction or conflicting duties. FINDINGS AND QUESTIONED COSTS – MAJOR FEDERAL AWARD PROGRAM AUDIT 2023-003: Coronavirus State and Local Fiscal Recovery Fund – AL# 21.027, Highway Planning and Construction – AL# 20.205, Late Filling of Data Collection Form Condition: The Town did not file the data collection form for the year ended June 30, 2023, timely. Criteria: For June 30, 2023, year-end audits, under the requirements in the Uniform Guidance and the Office of Management and Budget (OMB), all entities are required to submit the annual data collection form with the Federal Audit Clearinghouse the earlier of either 30 days after the issuance of the entity’s annual audit or nine months after the entity’s fiscal year end. Cause: Management did not complete and certify their portion of the form before the deadline. Form cannot be completed before audit is issued. Effect: The entity’s form was submitted to the Federal Audit Clearinghouse late, delaying the completion of all annual audit requirements for the Town. Recommendation: Management should take steps to ensure that the form is filed timely Planned Corrective Action: Management takes note of this finding. The Finance Director is working with the department to ensure that reports and the audit are completed in a timely manner.   FINDINGS AND QUESTIONED COSTS – MAJOR FEDERAL AWARD PROGRAM AUDIT (CONTINUED) 2023-004: Schedule of Expenditures and Federal Awards (Significant Deficiency) Condition: The Schedule of Expenditures and Federal Awards (SEFA) was prepared without supervisor review resulting in several auditor corrections. Criteria: Segregation of duties and review procedures should be applied to federal award workpapers. Cause: Town has not established written internal control policies with regard to federal awards. Effect: Risk that the Town’s information in the SEFA is not accurate, complete, or appropriately presented in accordance with Uniform Guidance. Recommendation: Management should develop and implement written internal control policies. Planned Corrective Action: Management has noted the opportunities for improvement in the review process and segregated duties as it pertains to audit preparation. The department continues to work on separating duties between the Assistant Finance Director and (Senior) Financial Administrators, who will complete the working papers. The Finance Director/Treasurer will then review them for correctness. In addition, the team will work to link the documents to reduce the adjustments of the final documents. If the Federal Audit Clearinghouse has questions regarding this plan, please call Andrew Keen, Finance Director (540) 983-0608 ext. 7012. Sincerely yours, Name: Andrew Keen Title: Finance Director

VIEWS OF RESPONSIBLE OFFICIALS 1. Assess the need to hire additional staff or reallocate existing resources to ensure the necessary capacity for continued FFATA/FSRS compliance. 2. Create a detailed and comprehensive Procedures Manual for FFATA/FSRS management and reporting, including steps for effective implementation of the process. 3. Develop and deliver a mandatory training program for all Office of Legal Affairs staff, and any other staff involved in the administration or monitoring of sub-awards. 4. Establish regular monitoring to ensure that FSRS reporting is conducted in a timely and accurate manner. IMPLEMENTATION DATE During Fiscal Year 2025-2026. RESPONSIBLE PERSON Office of Legal Affairs Administration for the Care and Comprehensive Development of Children (ACUDEN, by its Spanish Acronym)

Re: 2023-001 Improve Internal Controls over Reporting This letter is in response to the above referenced finding in the FY2023 Single Audit. The Town acknowledges the lateness of the filing of the report for FY2023, which was due to a misunderstanding as to the requirements on the use of ARPA funds that were considered as the standard allowance for revenue loss. Similarly, a reporting delay also happened for FY2024. We have taken action to ensure the issue does not reoccur.

Finding 2023.003 - Special Tests and Provisions - Sliding Fee Scale Documentation Recommendation The Center should establish a system of internal controls to ensure that all sliding fee discounts are properly calculated and supported based on family size and income. Action Taken I will work directly with the Director of Clinical Operations, Kei Wee, to conduct a comprehensive review of the Center's existing sliding fee scale policy to ensure alignment with federal guidelines and best practices, clarifying documentation requirements, including acceptable forms of income verification and definition of family size. The Clinical Operations Director, Kei Wee, will develop and implement a step-by-step standard operating procedure (SOP) for staff to consistently assess and apply sliding fee discounts. The SOP will include clear instructions for verifying documentation, calculating discount eligibility, and recording determinations in the patient's record. The Clinical Operations Director, Kei Wee's management team, will conduct monthly spot audits of a sample of sliding fee files to verify correct application and documentation. The managers will report the findings to management for corrective follow-up and provide training for registration/front-desk staff and billing personnel on the updated policy and procedures as needed.

GLRC is currently experiencing a delay in completion of their required audit which is causing us to miss filing to the single audit clearinghouse by June 30, 2025. We will be out of compliance for the 2024 audit but will be cathing up for meeting the June 2026 deadline for the 2025 audit. GLRC will be engaging a new audit firm for the upcoming fiscal year. Person(s) Responsible: Tracy Busse and Greg Toutant Timing for Implementation: GLRC expects to be caught up for June 30, 2026

Correction Action Plan – Finding 2023-002 “Improve Time and Effort Documentation” Correction Action to be taken: The Town is reviewing all school contracts and time sheets for inefficiencies and requiring adjustments or more documentation as necessary. Expected Completion Date: The Treasurer/Collector’s office has taken over most of the school’s payroll in FY25 and is working with our new School Business Manager to correct all of the timesheet inadequacies. We anticipate that all major inefficiencies within school payroll will be eradicated by December 31, 2025. The Town is also shifting to a new payroll system which will properly report time and attendance. Contact Person: Julie Hebert, Finance Director; Janet Jannell, Treasurer/Collector; Kaitlyn Shelar, School Business Manager

FINDING 2023-002 Information on the federal program: Federal Agency: Department of the Treasury Pass-Through Entity: N/A – Direct Grant Federal Program: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Assistance Listing Number: 21.027 Compliance Requirement: Reporting Audit Findings: Significant Deficiency Condition: City of Bloomington completed quarterly reporting in a timely manner substantiated by the City’s expenditure detail. However, management could not differentiate between subrecipients and standard vendor purchases. Context: During our testing procedures over CSLFRF reporting, we noted that segregation of duties is not present in the Federal reporting process. The Deputy Controller prepared and submitted the reports without a secondary review taking place. As a result, the City did not report expenditures for the grant that were consistent with the expenditures reported on the SEFA and could not properly identify subrecipient expenditures. Views of Responsible Officials and Planned Corrective Actions: Management will develop an internal controls process to ensure that there’s segregation of duties within the reporting process for federal programs. Responsible party and timeline for completion: The City’s Controller will oversee the implementation of the corrective action plan, which will be implemented starting during calendar year 2025.

Audit Finding Reference: 2023-001 - Improve Controls and Documentation over Reporting Process Planned Corrective Action: The Town acknowledges the discrepancy noted in the audit finding regarding the timing and documentation of expenditures included in the P&E Annual Report for the ARPA grant. We appreciate the opportunity to address this issue and confirm that we will implement improvements to strengthen our reporting process. Moving forward, the Town will utilize the MUNIS accounting system more effectively to ensure all expenditures are properly recorded and reported within the appropriate reporting periods. In addition, internal procedures will be reviewed and updated to reinforce timely data entry and review of grant-related transactions. Responsible staff have been made aware of the finding, and steps will be taken to ensure compliance with federal reporting requirements. Planned Implementation Date of Corrective Action: May 2025 Persion Resonsible for Corrective Action: Stephanie Pemberton, Town Accountant Please consider this the Town's official corrective action response to be included in the final audit report.

Finding No. 2023-007 CDBG Entitlement Grants Cluster Federal Assistance Listing Number #14.218 Uniform Guidance Compliance Requirement Code: A-Allowable Costs Criteria Owners must use CDBG funded portion of programs to fund minor rehabilitation services to approved recipients /address' in accordance with the Rehabilitation and Preservation Activities (570.202(b)(2) and/or (11)) during the grant period.. Condition The owner paid 1 vendor invoice of 79 tested, that was not incurred during the grant period and charged through to and was reimbursed by PHB under their CDBG Grant. Cause REACH's Community Builders Program Manager did not ensure that the invoices were for the appropriate grant period. Effect or Potential Effect CDBG funds may be spent inappropriately and REACH may be required to repay the grants and it may also result in a possible loss of future grants. Questioned Costs: $35. Context In connection with the procedures applied to compliance testing, there was 1 vendor invoice of 79 tested that was not for cost incurred during the grant period. Repeat Finding: No Recommendation REACH Community Builders Program Manager should follow procedures to ensure each vendor invoice is incurred during the grant period. Views of Responsible Officials Community Builders Program cell phone billing is part of the larger REACH billing system and this does create some challenges in approving billing as our IT department approves this billing. We are putting systems in place for the Community Builders Program Manager will work closer with the finance team to ensure all billing involves are for the correct time periods.

Finding No. 2023-006 CDBG Entitlement Grants Cluster Federal Assistance Listing Number #14.218 Uniform Guidance Compliance Requirement Code: A-Allowable Costs Criteria Owners must use CDBG funded portion of programs to fund minor rehabilitation services to approved recipients /address' in accordance with the Rehabilitation and Preservation Activities (570.202(b)(2) and/or (11)). Condition The owner paid 1 vendor invoice of 79 tested, that were not listed on the CDBG Address List as reported to Portland Housing Bureau (“PHB”) and charged through to and was reimbursed by PHB under their CDBG Grant. Cause REACH's Community Builders Program Manager did not ensure that the invoices were for an approved CDBG property. Effect or Potential Effect CDBG funds may be spent inappropriately and REACH may be required to repay the grants and it may also result in a possible loss of future grants. Questioned Costs: $40. Context In connection with the procedures applied to compliance testing, there was 1 vendor invoice of 79 tested that was not for an approved CDBG property. Repeat Finding: Yes – Finding 2022-007 Recommendation REACH Community Builders Program Manager should follow procedures to match each vendor invoice to the approved CDBG property listing prior to coding to CDBG and passing through for reimbursement from this grant. Views of Responsible Officials This instance was $40 that was in fact allocated incorrectly and the $40 spend was paid back to PHB in October 2024.

Finding No. 2023-005 CDBG Entitlement Grants Cluster Federal Assistance Listing Number #14.218 Uniform Guidance Compliance Requirement Code: N- Special Tests and Provisions Criteria Tenant lease files are required to be maintained and tenant eligibility determined in accordance with the Clark County Community Services CDBG Procedures Manual and grant documents. Condition In connection with our lease file review we noted two instances of seven tenants tested where management was unable to locate tenant files. Cause Management’s policies with respect to eligibility and the maintenance of tenant lease files in accordance with Compliance in Clark County Community Services CDBG Procedures Manual and grant documents were not consistently followed. Effect or Potential Effect This could result in units being rented to ineligible tenants. Questioned Costs: N/A. Context In connection with the procedures applied to our CDBG units testing, two of the seven tenants tested did have lease files available. Repeat Finding: No Recommendation Management should establish procedures and monitor compliance with those procedures to ensure that correct income verification procedures are performed timely, tenant eligibility is correctly determined and that tenant lease files are properly maintained in accordance with the requirements of Clark County Community Services CDBG Procedures Manual and grant documents. Views of Responsible Officials The Compliance Specialist discovered missing files at a property while pulling files for the audit. The Compliance team worked to contact residents and rebuild the files with the missing documents. Compliance management investigated and determined the cause of the missing documents was due to a prior site manager not scanning and filing the appropriate documents, along with high staff turnover during this time. The Compliance team is finalizing a new procedure, in addition to the existing, to audit Yardi Voyager for uploaded completed files after move-in and recertification: the goal of this is to catch missing files and documents timely and hold site teams accountable for following the required procedures.

Finding No. 2023-004 HUD Low Income Housing Preservation and Resident Homeownership Act of 1990 Federal Assistance Listing Number #99.999 Uniform Guidance Compliance Requirement Code: N- Special Tests and Provisions Criteria In accordance with the Use Agreement, Housing Quality Standards require that the Owner shall maintain the property in good repair and condition. Condition Management did not have in place proper procedures and controls to ensure that HQS inspections were performed during the year ended December 31, 2023. Cause Management did not perform HQS inspections during the year ended December 31 2023. Effect or Potential Effect Housing units may be out of compliance with HUD Quality Standards. Questioned Costs: Not applicable. Context In connection with the procedures applied to tenant file testing there were 3 instances of the 3 files tested where the passing HQS inspections were not performed during the year ended December 31, 2023. Repeat Finding: No Recommendation Management should resume making sure all units meet the HUD Housing Quality Standards and ensure that the responses to any findings are cleared timely. Views of Responsible Officials REACH did return to doing HQS Inspections in 2023, with staffing shortages it is possible that not every unit was inspected in 2023. Specifically, around the 3 instances of the 3 files tested after the finding were provided to REACH we provided the annual inspection for unit #11 at Beacon. For unit #5 at Beacon the annual inspection was not in the current resident file that was tested because the unit was vacant at the time of 2023 annual inspection. The annual inspection for the last file at Taylor this inspection was missed due to staffing changes at the time. REACH continued to reestablish our annual unit inspection process post COVID in 2024.

Finding No. 2023-003 HUD HOME Investment Partnerships Program Federal Assistance Listing Number #14.239 Uniform Guidance Compliance Requirement Code: E-Eligibility Criteria Each owner must comply with the requirements set forth in 24 CFR Part 92 regulations as outlined in the "Compliance in HOME Rental Projects: A Guide for Property Owners" published by HUD which requires the property to maintain the contracted number of HOME units as well as the designated splits in bedroom size and High Home/Low Home unit ratios. Condition The owner did not make available to HOME tenants the contracted number and type of HOME units. Cause Management’s policies with respect to maintaining the number and split of contracted HOME units were not consistently followed. Effect or Potential Effect The procedures for determining and maintaining the correct HOME units within the property were not applied. This could result in ineligible tenants occupying HOME designated units. Questioned Costs: Not applicable. Context In connection with the procedures applied to our HOME units testing, one of the five properties tested did not meet the contracted HOME units size portfolio (there should be four 3-bedroom units (there are 5); and there should be three 4-bedroom units (there are 2)). Repeat Finding: Yes - Finding 2022-003 Recommendation Management should follow procedures in place to ensure consistent application and adherence to the requirements in accordance with the “Compliance in HOME Rental Projects: A Guide for Property Owners” published by HUD. Views of Responsible Officials A unit will be re-classified the next time there is a vacant unit of the corresponding size/type.

Finding No. 2023-002 HUD HOME Investment Partnerships Program Federal Assistance Listing Number #14.239 Uniform Guidance Compliance Requirement Code: E-Eligibility Criteria Tenant lease files are required to be maintained and tenant eligibility determined in accordance with the Compliance in State of Oregon Housing and Community Services HOME Program Compliance Manual. Condition In connection with our lease file review we noted four instances of eight tenants tested where management did not provide support that they performed a 3rd party income verification in accordance with policy. Cause Management’s policies with respect to recertifications and eligibility and the maintenance of tenant lease files in accordance with Compliance in State of Oregon Housing and Community Services HOME Program Compliance Manual were not consistently followed. Effect or Potential Effect This could result in units being rented to ineligible tenants. Questioned Costs: Not applicable. Context In connection with the procedures applied to our HOME units testing, four of the eight tenants tested did not have the a 3rd party income verification in accordance with policy. Repeat Finding: Yes - Finding 2022-002 Recommendation Management should establish procedures and monitor compliance with those procedures to ensure that recertifications and correct income verification procedures are performed timely, tenant eligibility is correctly determined and that tenant lease files are properly maintained in accordance with the requirements of Compliance in State of Oregon Housing and Community Services HOME Program Compliance Manual. Views of Responsible Officials For the properties in Washington, they have several sources of HOME funds based on the issuing jurisdiction State, County or City that adds a layer of complexity to the recertification process and due to staffing turnover, both at the properties and REACH main office some of the HOME 3rd party income verifications were missed at recertification. Management has established policies and procedures for complying with the HOME program which includes a centralized tracker for HOME certifications.

Finding No. 2023-001 HUD HOME Investment Partnerships Program Federal Assistance Listing Number #14.239 Uniform Guidance Compliance Requirement Code: N-Special Tests and Provisions Criteria During the period of affordability (i.e., the period for which the nonfederal entity must maintain subsidized housing) for HOME assisted rental housing, the participating jurisdiction must perform on-site inspections to determine compliance with property standards and verify the information submitted by the owners no less than (a) every three years for projects containing one to four units, (b) every two years for projects containing five to 25 units, and (c) every year for projects containing 26 or more units. The participating jurisdiction must perform on-site inspections of rental housing occupied by tenants receiving HOME/HOME-ARP-assisted tenant- based rental assistance to determine compliance with housing quality standards (24 CFR sections 92.209(i), 92.251(f), and 92.504(d)). Condition The owner did not ensure passing HQS inspections were performed during 2023. Cause Management did not have in place proper procedures and controls to ensure that HQS inspections were performed during the year ended December 31, 2023. Effect or Potential Effect Housing units may be out of compliance with HUD Quality Standards. Questioned Costs: Not applicable. Context In connection with the procedures applied to tenant file testing there were 8 instances of the 8 files tested where the passing HQS inspections were not performed during the year ended December 31, 2023. Repeat Finding: Yes - Finding 2022-001 Recommendation Management should resume making sure all units meet the HUD Housing Quality Standards and ensure that the responses to any findings are cleared timely. Views of Responsible Officials REACH did return to doing HQS Inspections in 2023. With staffing shortages, it is possible that not every unit was inspected in 2023. REACH continued to reestablish our annual unit inspection process post COVID in 2024. For the finding related to Addy St. This property is managed by a 3rd party management company, REACH’s Asset Management team will work with the management company to ensure all inspections are happening.

Finding 2023-002 – Education Stabilization Fund – AL No.’s 84.425D & 84.425U Department of Education Massachusetts Department of Elementary and Secondary Education Noncompliance and Significant Deficiency Related to Internal Control over Compliance of the Major Program Criteria: Where employees work solely or partially on a single Federal program or cost objective, their salaries or wages must be supported by periodic certification that the employee worked on these programs for the period covered by the programs. The certifications should be prepared at least semi-annually, and or monthly and should be signed by the employee or supervisory official having first-hand knowledge of the work performed by the employee. Condition: During our test of controls over compliance with time and effort certifications the school department was not able to provide evidence that required certifications of time and effort for those employees whose time was spent either completely or partially spent on these programs were performed as required by Uniform Guidance. Questioned Costs: Unknown Context: During our test of payroll transactions of the Education Stabilization Fund grants it was noted that the time and effort certifications did not meet the semiannual and or monthly certification requirements. Effect: The School Department was not in compliance with the time and effort certification requirements. Cause: The School Department completed time and effort certifications on an annual basis rather than semi-annual or monthly. Identification as a Repeat Finding: N/A Recommendation: We recommend the School Department follow procedures to ensure that semi-annual certifications and/or monthly certifications are prepared and signed by either the employees and/or supervisory official having first-hand knowledge of the work performed by the employees in a timely manner in order to comply with the time and effort certification requirement. Managements Response: We acknowledge and agree with the recommendation to ensure that semi-annual and/or monthly certifications are prepared and signed by employees and/or supervisory officials who have first-hand knowledge of the work performed by the employees. We understand the importance of complying with the time and effort certification requirements. We would like to communicate that annual certifications were completed in FY 23, however, we will ensure that moving forward these certifications will be on a semi-annual and/or monthly basis. Responsible for Corrective Plan: School Business Manager Estimated Completion Date: Fiscal Year 2024 Action Taken: The Schools are now ensuring that their annual certification process be completed on a semi-annual and/or monthly basis, whichever is deemed necessary for the related position wages.

Condition: The Organization could not provide one salary authorization from for sample selection of 40 employees. Corrective Action Planned: The Organization has implemented a process to ensure that all salary authorizations are properly obtained and stored. When there is any change in an employee's status or salary, an Employee Status Form is completed and signed by the employee, their supervisor, and Human Resources, and when required by the COO and CEO. Additionally, the salary authorization form is added to a secure shared file drive. The shared file drive includes a section where all salary changes are listed. Both HR and Finance initial off to confirm that each salary change is supported by the proper documentation during the payroll review process. Person Responsible for Corrective Action: Joe Derry, Chief Financial Officer. Anticipated Completion Date: Implemented.

Condition: The Organization did not maintain property documentation to support the review of the report prior to submission to the grantor, other than the review done by the preparer. Corrective Action Planned: The Organization has hire a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties and best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review as also implemented in 2025. Person Responsible for Corrective Action: Joe Derry, Chief Financial Officer. Anticipated Completion Date: Implemented.

Condition: The Organization did not maintain proper documentation in support of reporting requirements. Corrective Action Planned: The Organization has hire a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal control and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025. Person Responsible for Corrective Action: Joe Derry, Chief Financial Officer. Anticipated Completion Date: Implemented.