Corrective Action Plans

Finding 1173483 (2024-002)

Material Weakness 2024

Town of Needham

MA

Reporting Significant Deficiency Internal Control / Segregation of Duties

Audit Finding Reference: 2024-002 Improve Internal Controls over Reporting Planned Corrective Action: The Town of Needham accounting department has developed a spreadsheet with all the due dates for all the federal grants with stringent report filing deadlines. Currently this includes all JAG, Opioi...

Audit Finding Reference: 2024-002 Improve Internal Controls over Reporting Planned Corrective Action: The Town of Needham accounting department has developed a spreadsheet with all the due dates for all the federal grants with stringent report filing deadlines. Currently this includes all JAG, Opioid, and both state and county ARPA grants. This sheet is constantly reviewed by the grant's coordinator as well as the town accountant. The grant's coordinator also has a reminder in her outlook a few weeks before the deadline date so reports can be printed and reviewed for accuracy before the filing is done. Planned Implementation Date of Corrective Action: This corrective action was put in place after the 2023 SEFA audit was completed when we noticed that we had slipped and missed a few deadlines. Unfortunately, the 2024 report was already filed with a date of 2 days past the deadline date. Person Responsible for Corrective Action: Michelle Vaillancourt, Town Accountant

View Audit 387243

Finding 1173251 (2024-002)

Material Weakness 2024

Morton County

ND

Reporting Significant Deficiency Matching / Level of Effort / Earmarking § 200.303

Condition: Morton County did not properly report expenditures on the March 31, 2024, Project and Expenditure Report for the Coronavirus State and Local Fiscal Recovery Funds program. The total cumulative expenditures were understated by $233,268. Management’s Response: We Agree. We will ensure futur...

Condition: Morton County did not properly report expenditures on the March 31, 2024, Project and Expenditure Report for the Coronavirus State and Local Fiscal Recovery Funds program. The total cumulative expenditures were understated by $233,268. Management’s Response: We Agree. We will ensure future project and expenditure reports have correct and accurate amounts submitted. Anticipated Completion Date: FY 2025

View Audit 386760

Finding 1172672 (2024-030)

Material Weakness 2024

Maryland Water Infrastructure Financing Agency

MD

Cash Management Significant Deficiency Matching / Level of Effort / Earmarking § 200.303

Higher Education Institutional Aid– Assistance Listing No. 84.031 Condition: The institution did not have effective internal controls over cash management. Recommendation: We recommend the institution review and implement their internal controls and procedures over cash management so that expenditur...

Higher Education Institutional Aid– Assistance Listing No. 84.031 Condition: The institution did not have effective internal controls over cash management. Recommendation: We recommend the institution review and implement their internal controls and procedures over cash management so that expenditures are being properly tracked, reconciled, and reviewed. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Drawdowns are currently prepared by one individual and reviewed by separate individual, however the supporting documentation does not consistently reflect that two individuals were involved in the drawdown; the procedures will require the sign off of both the preparer and the reviewer on the draw down documentation. Name(s) of the contact person(s) responsible for corrective action: Jeff Copeland Planned completion date for corrective action plan: March 31, 2025

View Audit 385911

Finding 1172667 (2024-027)

Material Weakness 2024

Maryland Water Infrastructure Financing Agency

MD

Special Tests & Provisions Significant Deficiency Matching / Level of Effort / Earmarking § 200.303

U.S. Department of Health and Human Services (DHHS) Maryland Department of Health respectfully submits the following corrective action plan for the year ended June 30, 2024. Audit period: July 1, 2023 – June 30, 2024 The findings from the schedule of findings and questioned costs are discussed below...

U.S. Department of Health and Human Services (DHHS) Maryland Department of Health respectfully submits the following corrective action plan for the year ended June 30, 2024. Audit period: July 1, 2023 – June 30, 2024 The findings from the schedule of findings and questioned costs are discussed below. The finding is numbered consistently with the numbers assigned in the schedule. FINDINGS—FEDERAL AWARD PROGRAMS AUDITS Maryland Department of Health 20XX-XXX Medicaid Cluster – Assistance Listing No. 93.775, 93.777, 93.778 Children Health Insurance Program – Assistance Listing No. 93.767 Recommendation: We recommend that the Department enhance its procedures and internal controls to ensure that overpayments are reported to CMS either in the quarter in which the recovery is made or in the quarter in which the one-year period following discovery ends, whichever is earlier. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Name(s) of the contact person(s) responsible for corrective action: Planned completion date for corrective action plan 20XX-XXX Medicaid Cluster – Assistance Listing No. 93.775, 93.777, 93.778 Recommendation: We recommend that the Department enhance its procedures and internal controls to ensure that RAC desk and field audits are performed timely and that overpayments are recouped. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding:. #1: The Department will direct the RAC vendor to begin all new audits using the current universe of available claims from MMIS II including claims from calendar years 2022-2024. This will ensure timely performance of audits and that overpayments are recouped. The Department will direct the current vendor to request the parameters for the claims from the RAC Contract Monitor and support in the transfer of these claims, so that the RAC vendor may begin including them in new audits that begin after April 1, 2025 through the end of their contract. #2: In addition, the RAC Contract Monitor will work with the Office of Contract Management and Procurement (OCMP) to determine if a contract modification is also needed/recommended to ensure timeliness of claims reviewed in RAC audits going forward, and if so, execute the needed contract modification. #3: Finally, the requirement to audit the most recent available claims will be included as language in the new Request for Proposals (RFP) for a RAC vendor that is expected to be issued in 2025. This RFP will be a competitive procurement to select the next contracted RAC vendor, and as such, will ensure this requirement for timely auditing of providers is maintained going forward regardless of which vendor is selected. Name(s) of the contact person(s) responsible for corrective action: Sandy Kick, Director, OMBM and Lynn Price, RAC Contract Monitor Planned completion date for corrective action plan: #1 & #2: June 30, 2025; #3: December 30, 2025 (expected to issue RFP). If the U.S DHHS has questions regarding this plan, please call Sandy Kick at 410-767-5248 or Lynn Price at (667) 208-0776.

View Audit 385911

Finding 1172662 (2024-026)

Material Weakness 2024

Maryland Water Infrastructure Financing Agency

MD

Reporting Special Tests & Provisions Significant Deficiency § 200.303

Medicaid Cluster – Assistance Listing No. 93.775, 93.777, 93.778 Children Health Insurance Program – Assistance Listing No. 93.767 Recommendation: We recommend that the Department enhance its procedures and internal controls to ensure that overpayments are reported to CMS either in the quarter in wh...

Medicaid Cluster – Assistance Listing No. 93.775, 93.777, 93.778 Children Health Insurance Program – Assistance Listing No. 93.767 Recommendation: We recommend that the Department enhance its procedures and internal controls to ensure that overpayments are reported to CMS either in the quarter in which the recovery is made or in the quarter in which the one-year period following discovery ends, whichever is earlier. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Management has engaged a third-party consultant to create procedures to ensure that a reconciliation is performed quarterly prior to submission of the CMS-64. A current draft of the procedure is under review. Name(s) of the contact person(s) responsible for corrective action: Jennifer Maher, CFO Healthcare Financing and Medicaid Program and Angeline Palank, Deputy

View Audit 385911

Finding 1172621 (2024-014)

Material Weakness 2024

Maryland Water Infrastructure Financing Agency

MD

Eligibility Reporting Significant Deficiency § 200.303

U.S. Department of the Treasury Department of Housing and Community Development respectfully submits the following corrective action plan for the year ended June 30, 2024. Audit period: July 1, 2023-June 30, 2024 The findings from the schedule of findings and questioned costs are discussed below. Th...

U.S. Department of the Treasury Department of Housing and Community Development respectfully submits the following corrective action plan for the year ended June 30, 2024. Audit period: July 1, 2023-June 30, 2024 The findings from the schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. FINDINGS—FEDERAL AWARD PROGRAMS AUDITS Department of Housing and Community Development 2024-014 COVID-19 – Emergency Rental Assistance Program – Assistance Listing No. 21.023 Recommendation: We recommend that the Department review and enhance supervisor review and approval to ensure that program requirements are consistently performed. Documentation to support compliance with the requirements should be maintained and readily available for review. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The subrecipient who administered the assistance for three (3) of the four (4) affected records has fully expended ERA 2 funds. DHCD will review the subrecipient’s internal approvals process and tenant notification process to determine where improvements can be made and issue recommended recordkeeping changes for the subrecipient to implement for future federal subawards. DHCD will review and make necessary changes to program policy guides as necessary to strengthen case file recordkeeping requirements and ensure that case file reviews for direct financial assistance programs include a review of notifications to clients. In prior desk monitoring and file audits, the relevant subrecipient files always included a notification of assistance to the tenant. Name(s) of the contact person(s) responsible for corrective action: Danielle Meister Planned completion date for corrective action plan: April 30, 2025 2024-015 COVID-19 – Homeowner Assistance Fund – Assistance Listing No. 21.026 Recommendation: The Department should reevaluate current process, implement proper controls, and perform additional training over time and effort reporting. The Department should not seek federal reimbursement unless they can substantiate that the time and effort was dedicated to the federal program. Documentation should be readily available for audit. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Monthly reporting to Senior Management of any exceptions to the federal timesheet process will be required to ensure that all federal timesheets are completed and received in a timely manner. Name(s) of the contact person(s) responsible for corrective action: Wade Simmons Planned completion date for corrective action plan: April 30, 2025 If the U.S. Department of the Treasury has questions regarding this plan, please call Crystal Quinzani at (301) 429-7840.

View Audit 385911

Finding 1172615 (2024-011)

Material Weakness 2024

Maryland Water Infrastructure Financing Agency

MD

Allowable Costs / Cost Principles Subrecipient Monitoring Period of Performance § 200.303 § 200.308 § 200.309 § 200.403

1. The Maryland Military Department respectfully submits the following corrective action plan for the year ended June 30, 2024.Projects – Assistance Listing No. 12.401 (1) Recommendation: The Department should review and enhance its procedures and internal controls to ensure that it charges expendit...

1. The Maryland Military Department respectfully submits the following corrective action plan for the year ended June 30, 2024.Projects – Assistance Listing No. 12.401 (1) Recommendation: The Department should review and enhance its procedures and internal controls to ensure that it charges expenditures to the program that are incurred within an award's allowable period of performance. (2) Explanation of disagreement with audit finding: There is no disagreement with the audit finding. (3) Action taken in response to finding: The Department will carefully exam and allocate expenses to the fiscal year in which they are incurred, ensuring proper period assignment when expenses span multiple fiscal years. This will confirm accurate costs charged to the programs. 2. Audit period: July 1, 2023-June 30, 2024 3. The findings from the schedule of findings and questioned costs are discussed below. The finding is numbered consistently with the numbers assigned in the schedule. 4. FINDINGS—FEDERAL AWARD PROGRAMS AUDITS: a. Finding 2024-011: National Guard Military Operations and Maintenance (O&M

View Audit 385911

Finding 1172614 (2024-010)

Material Weakness 2024

Maryland Water Infrastructure Financing Agency

MD

Reporting Significant Deficiency Matching / Level of Effort / Earmarking § 200.303

STATE OF MARYLANDCOVID-19 – Pandemic EBT – Assistance Listing No. 10.542 Recommendation: We recommend the Department enhance its procedures and internal controls to ensure that it submits programmatic reports on a timely basis. Explanation of disagreement with audit finding: No disagreement. Action ...

STATE OF MARYLANDCOVID-19 – Pandemic EBT – Assistance Listing No. 10.542 Recommendation: We recommend the Department enhance its procedures and internal controls to ensure that it submits programmatic reports on a timely basis. Explanation of disagreement with audit finding: No disagreement. Action taken in response to finding: Google Calendar (the Department’s internal calendar) reminders will be set up to generate reminders of the due dates for the reports, as well as, an internal tracker will be created to monitor the due dates and the submission of the reports. These tools will be used by Management to ensure the federal reports are submitted timely according to the United States Department of Agriculture Food and Nutrition Service (FNS) program integrity calendar. Name(s) of the contact person(s) responsible for corrective action: Jessica Smith, Acting Chief Financial Officer Planned completion date for corrective action plan: June 2025 CORRECTIVE ACTION PLAN YEAR ENDED JUNE 30, 2024 U.S. Department of Agriculture Department of Human Services respectfully submits the following corrective action plan for the year ended June 30, 2024. Audit period: July 1, 2023 - June 30, 2024 The findings from the schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. FINDINGS—FEDERAL AWARD PROGRAMS AUDITS Department of Human Service

View Audit 385911

Finding 1172400 (2024-002)

Material Weakness 2024

South Seven Senior Village

WA

Subrecipient Monitoring HUD Housing Programs Reporting

Management Response: To enhance compliance and operational efficiency, OLYCAP engaged a contract manager to support timely fulfillment of reporting obligations and contractual requirements. This role also includes onboarding new management personnel by ensuring they are informed of all relevant cont...

Management Response: To enhance compliance and operational efficiency, OLYCAP engaged a contract manager to support timely fulfillment of reporting obligations and contractual requirements. This role also includes onboarding new management personnel by ensuring they are informed of all relevant contracts and associated reporting protocols. Anticipated Completion Date: April, 2025 and ongoing. Responsible officials: Erin Smith Holly Morgan

View Audit 385457

Finding 1172357 (2024-005)

Material Weakness 2024

1890 Universities Foundation

DC

Reporting Significant Deficiency § 200.512

Finding 2024-005: Significant Deficiency and Noncompliance over Subrecipient Monitoring Responsible Official’s Response and Corrective Action Plan We concur with the findings and acknowledge the significant deficiency and instance of noncompliance related to subrecipient monitoring. We are committed...

Finding 2024-005: Significant Deficiency and Noncompliance over Subrecipient Monitoring Responsible Official’s Response and Corrective Action Plan We concur with the findings and acknowledge the significant deficiency and instance of noncompliance related to subrecipient monitoring. We are committed to strengthening internal controls to ensure full compliance with applicable federal requirements. During 2025, we implemented a corrective action plan that included the development and adoption of a comprehensive subrecipient monitoring policy and the establishment of standardized, documented procedures for the review of financial and performance reports. These actions are designed to create a consistent, risk-based, and fully documented monitoring framework that enhances accountability, reduces compliance risk, and ensures proper stewardship of federal funds. We remain committed to continuously improving our processes and maintaining compliance with all applicable regulations moving forward. Planned Implementation Date of Corrective Action Plan November 2025 Person Responsible for Corrective Action Plan Natésha Johnson, Director of Finance and Administration Dr. Felecia Nave, President and Chief Executive Officer

View Audit 385388

Finding 1172354 (2024-002)

Material Weakness 2024

1890 Universities Foundation

DC

Allowable Costs / Cost Principles Period of Performance Significant Deficiency § 200.430

Finding 2024-002: Significant Deficiency Activities Allowed or Unallowed and Allowable Cost/Cost Principle (Payroll) Responsible Official’s Response and Corrective Action Plan We concur with the finding related to deficiencies in our time tracking Process. Starting in the fourth quarter of fiscal ye...

Finding 2024-002: Significant Deficiency Activities Allowed or Unallowed and Allowable Cost/Cost Principle (Payroll) Responsible Official’s Response and Corrective Action Plan We concur with the finding related to deficiencies in our time tracking Process. Starting in the fourth quarter of fiscal year 2025, a time tracking system using Paychex Time & Attendance was implemented. This system is designed to accurately capture, and record employees’ hours worked by project/grant. Comprehensive training sessions have been conducted for all affected employees to ensure they are proficient in using the new time tracking system. Supervisors have received additional training on monitoring and verifying time entries. Planned Implementation Date of Corrective Action Plan October 2025 Person Responsible for Corrective Action Plan Natésha Johnson, Director of Finance and Administration Dr. Felecia Nave, President and Chief Executive Officer

View Audit 385388

Finding 1172320 (2024-003)

Material Weakness 2024

Bristol Bay Borough, Alaska

AK

Period of Performance Allowable Costs / Cost Principles Reporting § 200.512

Finding 2024-003: Reporting - Timely Submission of Financial Reports – Noncompliance and Significant Deficiency in Internal Control over Compliance Name of Contact Person: Courtney Hoiby, Interim Finance Director Corrective Action Plan: The Borough has engaged accounting resources and staff with the...

Finding 2024-003: Reporting - Timely Submission of Financial Reports – Noncompliance and Significant Deficiency in Internal Control over Compliance Name of Contact Person: Courtney Hoiby, Interim Finance Director Corrective Action Plan: The Borough has engaged accounting resources and staff with the appropriate time and expertise to expedite the completion of future financial reports. Completion Date: September 30, 2026

View Audit 385350

Finding 1172106 (2024-001)

Material Weakness 2024

Coordinated Behavioral Care

NY

Reporting Significant Deficiency § 200.512

Management remains committed to full compliance with federal reporting requirements. Once all outstanding filings are brought up to date, we will ensure that future submissions are completed within the required deadlines.

View Audit 385259

Finding 1171869 (2024-006)

Material Weakness 2024

Municipality of Loiza

PR

Subrecipient Monitoring Reporting Significant Deficiency § 200.339

The Municipality Administration is currently addressing the control and compliance issue. Starting on January 2026 prior year reports will be submitted. Full compliance expected to start on January 2026 going forward.

View Audit 384837

Finding 1171868 (2024-005)

Material Weakness 2024

Municipality of Loiza

PR

Subrecipient Monitoring Internal Control / Segregation of Duties Reporting § 200.339

All monthly reports were delivered on time to AFAAF as established on the guidelines and following the agency’s reporting guidelines and support. The Municipality is full compliance with the Puerto Rico Fiscal Agency and Financial and Financial Advisory Authority

View Audit 384837

Finding 1171867 (2024-004)

Material Weakness 2024

Municipality of Loiza

PR

Reporting Significant Deficiency § 200.12 § 200.508 § 200.510 § 200.512

The Municipality is working diligently to publish its statements on time. In 2025 the Municipality published two audited statements (2022 and 2023) and the 2024 audited statements are expected to be published in January 2026. The 2025 audited financial statements will be published on time.

View Audit 384837

Finding 1171693 (2024-101)

Material Weakness 2024

City of Parker, Florida

FL

Special Tests & Provisions Subrecipient Monitoring Cash Management § 200.303

City of Parker Management’s Corrective Action Plan For the Fiscal Year Ended September 30, 2024 Financial Statement Finding Number: 2024-101: Reimbursement Requests were Not Formally Approved by the City Prior to Submission Planned Corrective Action: The City will update its procedures to require do...

City of Parker Management’s Corrective Action Plan For the Fiscal Year Ended September 30, 2024 Financial Statement Finding Number: 2024-101: Reimbursement Requests were Not Formally Approved by the City Prior to Submission Planned Corrective Action: The City will update its procedures to require documented City review and approval of all reimbursement requests prior to submission to a grantor. The City will also clarify responsibilities with the consultant to ensure submission and acknowledgment are independently performed and appropriately documented. Anticipated Completion Date: 09/30/2026 Responsible Contact Person: Kimberly Dalton, Bookkeeper

View Audit 384721

Finding 1171402 (2024-002)

Material Weakness 2024

Center for Independence of Individuals with Disabilities

CA

Subrecipient Monitoring Significant Deficiency Internal Control / Segregation of Duties § 200.303

Immediate Control Reinforcement and Staff Training - The Executive Director and the Program Manager have already started identifying specific areas of each contract and grant for federal awards. The Executive Director will call a meeting between all managers to go over each contract and grants toget...

Immediate Control Reinforcement and Staff Training - The Executive Director and the Program Manager have already started identifying specific areas of each contract and grant for federal awards. The Executive Director will call a meeting between all managers to go over each contract and grants together with information that has already been reviewed. It will be important to observe specific instances when controls were created, and documentation was not accurate. Staff will be trained regarding the agency budget, and each role and responsibility of their program to better understand how their service delivery affects organizational funding. Monthly monitoring of grant funding from all managers will be important for transparency and prudent decision making. All managers will receive frequent training to keep up with any changes or new processes that will impact federal funding. Monitoring and Periodic Internal Auditing - The Executive Director, Program Manager, and Finance manager will meet every month before the Finance Committee meeting to go over the progression of spending. The Executive Director and Finance Manager will keep record of all information that will be helpful for the next audit regarding federal grants. Written corrective action plans will be created for each area of noncompliance. Finance Manager will be responsible for maintaining accurate budget updates and will inform Executive Director of any updates and changes as soon as they happen to ensure full transparency and preparation. Failure to do so will result in disciplinary consequences. All information will be presented to the Board of Directors whether at the monthly Board meeting or at the request for a special meeting. Documentation and Formalization - The Executive Director will meet with the Finance Manager to understand what process is used for quality assurance and documentation the finance staff uses. Any improvements necessary will be implemented as soon as possible after evaluating all processes. An evaluation of the software used for tracking all grant funding will be done and any quality assurance improvements will be implemented as soon as possible. Federal grants compliance adherence will be included in performance reviews and documented.

View Audit 384680

Finding 1170826 (2024-002)

Material Weakness 2024

The City of Oklahoma City

OK

Allowable Costs / Cost Principles Internal Control / Segregation of Duties Procurement, Suspension & Debarment § 200.303

Finding 2024-002: (Significant Deficiency) AL# 21.027: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds, U.S. Department of Treasury Condition: The City’s control procedures for the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) requires the department personnel to authorize ...

Finding 2024-002: (Significant Deficiency) AL# 21.027: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds, U.S. Department of Treasury Condition: The City’s control procedures for the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) requires the department personnel to authorize payment and the program manager to certify the expenditures to the CSLFRF program prior to being paid. The program manager did not approve four invoices prior to the expenditure being charged to the grant. Criteria or Specific Requirement: 2 CFR 200.303, the Non-Federal entity must establish and maintain effective internal controls over federal awards to ensure compliance with federal statutes, regulations and the terms and conditions of the awards. Cause: Purchase orders are created that identify projects that are part of the CSLFRF and expenditures coding is assigned at that time prior to the purchase. Once the invoice was approved by department personnel, the expenditures were applied to the assigned purchase order coding. Effect: Failure to follow established internal controls increases the risk of noncompliance with the grant requirements and processing unallowable costs towards the grant. Corrective Plan: To address the underlying issues identified in the audit finding, the City will implement the following steps: 1.Correct Approval Control GapInternal Audit worked with Accounts Payable and department personnel and made recommendations tocorrect the control gap and ensure compliance with approval procedures. It is anticipated theserecommendations will be implemented in the next two months. Additional review steps were added inaccounts payable to ensure required approvals obtained prior to payment processing. 2.Implement Monitoring ReportAccounting services developed a report to verify approvals and provide secondary oversight for CSLFRFexpenditures. These actions will be implemented and monitored to ensure compliance with grant requirements. Alex Fedak, CPA 1/7/26 Date Controller

View Audit 384102

Finding 1170825 (2024-004)

Material Weakness 2024

The City of Oklahoma City

OK

Cash Management HUD Housing Programs Reporting § 200.303

Finding 2024-004: (Significant Deficiency) AL# 14.218: CDBG - Entitlement Grants Cluster, U.S. Department of Housing and Urban Development, all open grants and years Condition: During testing of the PR26 – CDBG Financial Summary report, it was identified that one payroll cycle was reported twice, re...

Finding 2024-004: (Significant Deficiency) AL# 14.218: CDBG - Entitlement Grants Cluster, U.S. Department of Housing and Urban Development, all open grants and years Condition: During testing of the PR26 – CDBG Financial Summary report, it was identified that one payroll cycle was reported twice, resulting in a duplication of payroll costs and an overstated reimbursement request. Criteria or Specific Requirement: 2 CFR 200.303(a) states that the City is required to establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Cause: The The ERP system conversion presented challenges to the City related to report development and in particular accuracy of the project management system. Effect: The reimbursement request was overstated, resulting in an excess draw of funds. This creates a risk of noncompliance with the grant requirements and potential repayment of funds. Corrective Plan: To address the underlying issues identified in the audit finding, the City will implement the following steps: 1.Coordinate with HUDResolve the duplicated payroll amount, including reimbursement or offset of the excess draw,in accordance with HUD guidance. 2.Reconcile Payroll Expenditures and DrawsPerform reconciliation of payroll-related expenditures and reimbursement draws for all HUDgrants for January 1–June 30, 2024, to ensure amounts claimed agree to general ledgeractivity. 3.Strengthen Recordkeeping and Reimbursement PracticesIn addition, the City will ensure that recordkeeping and reimbursement preparationpractices related to payroll expenses included in grant draw requests are sufficient tosupport amounts claimed and agree to general ledger activity.The Accounting Services Division will review existing departmental documentation practicesand communicate consistent expectations and best practices to promote accurate, complete,and supportable payroll draw requests.The City anticipates working with the department and having this process fully in place within3–4 months. These actions will be implemented and monitored to ensure compliance with grant requirements. Benjamin E Davis 1/7/26 Date Principal Planner Alex E Fedak 1/7/26 Date Controller

View Audit 384102

Finding 1170332 (2024-020)

Material Weakness 2024

Kentucky State University

KY

Matching / Level of Effort / Earmarking Significant Deficiency

Federal Agency: Department of Education Federal Program Name: Education Stabilization Fund Assistance Listing No.: 84.425 Recommendation: We recommend the University should implement and maintain an effective system of internal controls over the administration of HEERF funds to ensure earmarking req...

Federal Agency: Department of Education Federal Program Name: Education Stabilization Fund Assistance Listing No.: 84.425 Recommendation: We recommend the University should implement and maintain an effective system of internal controls over the administration of HEERF funds to ensure earmarking requirements are met. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: KSU Grants Accounting will maintain proper documentation for HEERF reporting. Grants Accounting will monitor HEERF funds to ensure compliance with guidelines. KSU will assign responsibility for Direct Outreach to appropriate employees in Student Financial Aid and provide training on job duties. Grants Accounting will follow-up to verify corrections needed for previous reports, correct reports, and submit corrected reports. Name(s) of the contact person(s) responsible for corrective action: Dorothy Daley, Director of Sponsored Projects Planned completion date for corrective action plan: Complete

View Audit 383421

Finding 1170316 (2024-017)

Material Weakness 2024

Kentucky State University

KY

Reporting Significant Deficiency Internal Control / Segregation of Duties

Federal Agency: Department of Education Federal Program Name: Education Stabilization Fund Assistance Listing No.: 84.425 Recommendation: We recommend the University implement and maintain an effective system of internal controls over the administration of HEERF funds to ensure funds are reported ac...

Federal Agency: Department of Education Federal Program Name: Education Stabilization Fund Assistance Listing No.: 84.425 Recommendation: We recommend the University implement and maintain an effective system of internal controls over the administration of HEERF funds to ensure funds are reported accurately and timely, in accordance with grant requirements. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: KSU Grants Accounting will maintain proper documentation for HEERF reporting. Grants Accounting will monitor HEERF funds to ensure compliance with guidelines. KSU will assign responsibility for Direct Outreach to appropriate employees in Student Financial Aid and provide training on job duties. Grants Accounting will follow-up to verify corrections needed for previous reports, correct reports, and submit corrected reports. Name(s) of the contact person(s) responsible for corrective action: Dorothy Daley, Director of Grants; Varah Barnett, Financial Aid Director Planned completion date for corrective action plan: Complete

View Audit 383421

Finding 1170314 (2024-016)

Material Weakness 2024

Kentucky State University

KY

Student Financial Aid Eligibility Significant Deficiency

Federal Agency: US Department of Education Federal Program Name: Federal Perkins Loan Program Assistance Listing No.: 84.038 Recommendation: We recommend reviewing procedures around Perkins Loan Program funds and implementing reconciliations and review to the third-party servicer reports. Explanatio...

Federal Agency: US Department of Education Federal Program Name: Federal Perkins Loan Program Assistance Listing No.: 84.038 Recommendation: We recommend reviewing procedures around Perkins Loan Program funds and implementing reconciliations and review to the third-party servicer reports. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The university has implemented policies and procedures regarding reconciliations for Perkins loan services managed by a 3rd party supplier. Name(s) of the contact person(s) responsible for corrective action: Danyel Tolbert, Bursar Planned completion date for corrective action plan: Complete

View Audit 383421

Finding 1170313 (2024-015)

Material Weakness 2024

Kentucky State University

KY

Student Financial Aid Internal Control / Segregation of Duties Eligibility

Federal Agency: US Department of Education Federal Program Name: Federal Perkins Loan Program Assistance Listing No.: 84.038 Recommendation: We recommend reviewing procedures and requirements regarding Perkins third-party service providers to ensure compliance with regulations. Explanation of disagr...

Federal Agency: US Department of Education Federal Program Name: Federal Perkins Loan Program Assistance Listing No.: 84.038 Recommendation: We recommend reviewing procedures and requirements regarding Perkins third-party service providers to ensure compliance with regulations. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The university has implemented policies and procedures regarding reconciliations for Perkins loan services managed by a 3rd party supplier. Name(s) of the contact person(s) responsible for corrective action: Danyel Tolbert, Bursar Planned completion date for corrective action plan: Complete

View Audit 383421

Finding 1170312 (2024-014)

Material Weakness 2024

Kentucky State University

KY

Student Financial Aid Significant Deficiency Matching / Level of Effort / Earmarking

Federal Agency: US Department of Education Federal Program Name: Federal Direct Student Loans Assistance Listing No.: 84.268 Recommendation: We recommend management maintain proper recordkeeping and retention of documentation and review of such documentation. Explanation of disagreement with audit f...

Federal Agency: US Department of Education Federal Program Name: Federal Direct Student Loans Assistance Listing No.: 84.268 Recommendation: We recommend management maintain proper recordkeeping and retention of documentation and review of such documentation. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The University implemented new procedures related to reconciling drawdown requests and approvals in FY25. The Director of Financial Aid meets monthly with Finance and Grants Accounting to review reconciliations. Finance now submits drawdown requests to the CFO for prior-approval and documentation is maintained in the Accounting department. Name(s) of the contact person(s) responsible for corrective action: Melissa Hicks, Controller Planned completion date for corrective action plan: Complete

View Audit 383421

Corrective Action Plans

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