Corrective Action Plans

Finding 1218551 (2025-034)

Material Weakness 2025

State of Michigan

MI

Reporting Subrecipient Monitoring

Finding 2025-034 CCDF Cluster, ALN 93.575 and 93.596 - FFATA Reporting Management Views MiLEAP agrees with the finding. Planned Corrective Action MiLEAP implemented a process for FFATA reporting in September 2025 and also hired additional staff in fiscal year 2026 who are responsible for reporting r...

Finding 2025-034 CCDF Cluster, ALN 93.575 and 93.596 - FFATA Reporting Management Views MiLEAP agrees with the finding. Planned Corrective Action MiLEAP implemented a process for FFATA reporting in September 2025 and also hired additional staff in fiscal year 2026 who are responsible for reporting required FFATA data for all federal grants to ensure subaward information is reported timely. Anticipated Completion Date Completed Responsible Individual(s) Lora MacKay, MiLEAP Dawn Lake, MiLEAP

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Finding 1218547 (2025-009)

Material Weakness 2025

State of Michigan

MI

Subrecipient Monitoring Cash Management Internal Control / Segregation of Duties § 200.303

Finding 2025-009 MDE, Security Management and Access Controls Management Views MDE agrees with the finding. Planned Corrective Action For part a., management will review the exceptions with the team responsible for processing security forms to reinforce appropriate review and processing. MDE will al...

Finding 2025-009 MDE, Security Management and Access Controls Management Views MDE agrees with the finding. Planned Corrective Action For part a., management will review the exceptions with the team responsible for processing security forms to reinforce appropriate review and processing. MDE will also implement an automated security access request process, which will eliminate any human error as a result of processing forms. For part b., management will refine the NexSys annual recertification process to reduce errors. NexSys staff will improve internal user list reviews and confirm completeness during the upcoming recertification cycle prior to management’s final review. MDE is currently developing an automated process to handle the annual recertification of the Grant Electronic Monitoring System/Michigan Administrative Review System (GEMS/MARS) users and anticipates implementation in September 2026. For part c., MDE updated the procedure for disabling accounts in April 2026 to strengthen and clarify the process to ensure MDE disables inactive user accounts after 18 months. Anticipated Completion Date a. May 2027 b. NexSys: October 2026 GEMS/MARS: September 2026 c. Completed Responsible Individual(s) Monica Butler, MDE Joshua Long, MDE Drew Finkbeiner, MDE

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Finding 1218543 (2025-001)

Material Weakness 2025

State of Michigan

MI

Subrecipient Monitoring Internal Control / Segregation of Duties

Finding 2025-001 SIGMA High-Risk Activity Monitoring Management Views The Michigan Department of Lifelong Education, Advancement, and Potential (MiLEAP) agrees with the finding. Planned Corrective Action MiLEAP started monitoring its high-risk activity report weekly to ensure users performed only au...

Finding 2025-001 SIGMA High-Risk Activity Monitoring Management Views The Michigan Department of Lifelong Education, Advancement, and Potential (MiLEAP) agrees with the finding. Planned Corrective Action MiLEAP started monitoring its high-risk activity report weekly to ensure users performed only authorized override actions in SIGMA beginning June 20, 2025. Anticipated Completion Date Completed Responsible Individual(s) Lora MacKay, MiLEAP Dawn Lake, MiLEAP Erica Nowland, MiLEAP

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Finding 1218522 (2025-063)

Material Weakness 2025

State of Michigan

MI

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

Finding 2025-063 Special Education Cluster (IDEA), ALN 84.027 and 84.173 Management Views MDE disagrees with the finding. MDE maintains that its current monitoring approach satisfies federal requirements. The MDE Office of Special Education’s (OSE) monitoring framework is consistent with the risk-ba...

Finding 2025-063 Special Education Cluster (IDEA), ALN 84.027 and 84.173 Management Views MDE disagrees with the finding. MDE maintains that its current monitoring approach satisfies federal requirements. The MDE Office of Special Education’s (OSE) monitoring framework is consistent with the risk-based requirements of the Uniform Guidance (2 CFR 200.332). The Uniform Guidance does not require routine review of underlying supporting documentation for every subrecipient in every monitoring cycle. Rather, source documentation review is one available monitoring tool, which MDE OSE uses, when warranted, based on risk, audit results, identified concerns, or other relevant information. MDE OSE’s monitoring activities include budget review and approval, budget-to-actual analysis, review of expenditure activity, direct engagement and technical assistance with subrecipients, review of single audit reports, issuance of management decisions (when applicable), and enhanced review procedures for higher-risk subrecipients. These activities collectively provide reasonable assurance that funds are used for authorized purposes and in compliance with applicable requirements. MDE OSE also notes that subrecipient single audits have not routinely identified questioned costs or significant noncompliance, which supports the effectiveness of the existing monitoring framework. Planned Corrective Action MDE disagrees with the finding and does not believe corrective action is required to resolve noncompliance. However, MDE OSE will update its internal monitoring procedures to document the circumstances under which expenditure sampling may be performed for medium- and low-risk subrecipients to enhance clarity of MDE OSE procedures. Anticipated Completion Date September 30, 2026 Responsible Individual(s) Sean McLaughlin, MDE

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Finding 1218520 (2025-060)

Material Weakness 2025

State of Michigan

MI

Procurement, Suspension & Debarment Subrecipient Monitoring Reporting § 200.303

Finding 2025-060 Coronavirus Capital Projects Fund, ALN 21.029 Management Views LEO agrees with the finding. Planned Corrective Action The LEO Finance Division and the LEO Grants Division have identified the deficiencies that led to the audit finding. LEO will correct the internal FFATA reporting pr...

Finding 2025-060 Coronavirus Capital Projects Fund, ALN 21.029 Management Views LEO agrees with the finding. Planned Corrective Action The LEO Finance Division and the LEO Grants Division have identified the deficiencies that led to the audit finding. LEO will correct the internal FFATA reporting process to ensure that new and amended subaward contract information is received by the LEO Finance Division in a timely manner and in accordance with FFATA requirements. LEO will utilize the EGrAMS vendor to update software functionality that will generate an email notification to the LEO Finance Division when a grant agreement is finalized or amended. This notification will ensure communication with the LEO Finance Division occurs in a timely manner and in accordance with FFATA requirements. Anticipated Completion Date June 30, 2026 Responsible Individual(s) Jennifer Duffey, LEO Heidi Parker, LEO

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Finding 1218519 (2025-031)

Material Weakness 2025

State of Michigan

MI

Subrecipient Monitoring § 200.332 § 200.501 § 200.521

Finding 2025-031 Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027 - Subrecipient Audits Management Views EGLE and DNR agree with the finding. Planned Corrective Action For part a., the EGLE Budget Unit within the EGLE Finance Division has updated system access to reflect the correct per...

Finding 2025-031 Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027 - Subrecipient Audits Management Views EGLE and DNR agree with the finding. Planned Corrective Action For part a., the EGLE Budget Unit within the EGLE Finance Division has updated system access to reflect the correct permissions. The subrecipient expenditure query now displays statewide expenditures as intended. This correction is currently in place, and EGLE will continue to monitor access to ensure accuracy going forward. For part b., DNR did not sufficiently update its existing process and procedures for monitoring subrecipients when the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) program was introduced. Consequently, certain recipients paid from the federal accounting fund code established for CSLFRF were inadvertently excluded from DNR’s review. DNR revised its subrecipient monitoring procedures to ensure that future subrecipient expenditure queries capture all entities receiving federal funds from DNR. The updated procedures incorporate the appropriate DNR federal accounting fund codes when running expenditure queries in SIGMA Business Intelligence for all fiscal years going forward. DNR also implemented and conducted an annual review of its subrecipient monitoring process and procedures to identify any new federal programs and ensure the corresponding federal accounting fund codes are appropriately captured. Anticipated Completion Date Completed Responsible Individual(s) a. Jon Doyle, EGLE Daniel Lance, EGLE b. Brian W. Schimke, DNR Rob Eisinger, DNR Marty Clark, DNR

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Finding 1218518 (2025-030)

Material Weakness 2025

State of Michigan

MI

Subrecipient Monitoring § 200.332

Finding 2025-030 Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027 - Subaward Information Management Views MSF agrees with the finding. While each grant agreement included a list of allowable costs by subrecipients, the agreements did not explicitly disallow research and development (R&D...

Finding 2025-030 Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027 - Subaward Information Management Views MSF agrees with the finding. While each grant agreement included a list of allowable costs by subrecipients, the agreements did not explicitly disallow research and development (R&D) costs and did not identify the subrecipient’s indirect cost rate. No expenditures of disallowed costs were identified. Planned Corrective Action MSF will inform all applicable current subrecipients that funding is not intended to support R&D activities and indirect costs are not eligible costs. Anticipated Completion Date September 30, 2026 Responsible Individual(s) Chris Rishko, MSF

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Finding 1218517 (2025-029)

Material Weakness 2025

State of Michigan

MI

Subrecipient Monitoring Cash Management § 200.303

Finding 2025-029 Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027 - MiGrants Security Management and Access Controls Management Views The Department of Natural Resources (DNR) agrees with the finding. Planned Corrective Action DNR recognizes the importance of maintaining strong security...

Finding 2025-029 Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027 - MiGrants Security Management and Access Controls Management Views The Department of Natural Resources (DNR) agrees with the finding. Planned Corrective Action DNR recognizes the importance of maintaining strong security and access controls for the MiGrants system. While DNR has updated many internal processes to align with revised SOM technical standards, additional actions are needed to further strengthen its controls and ensure comprehensive documentation. For part a., each DNR division administrator will maintain thorough documentation of all internal roles assigned related to MiGrants access and verify adequate justification is provided for each role assigned. Each division administrator will be responsible for creating a procedure that identifies the process that captures appropriate approval information for the internal roles assigned by their division. The system administrator will establish a shared repository in a centralized location where the information is stored. For part b., DNR will implement a formal recertification review for all MiGrants users annually, ensuring that supporting documentation is complete and properly retained. For part c., DNR received an exception in June 2026 from the DTMB Technical Review Board to SOM Technical Standard 1340.00.020.01 (Access Control Standard) that extends the requirement for disabling inactive user accounts from 60 days to 365 days. Anticipated Completion Date a. February 28, 2027 b. December 31, 2026 c. Completed Responsible Individual(s) Leah Babcock, DNR Bobbi Audette, DNR Kerry Grey, DNR

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Finding 1218515 (2025-027)

Material Weakness 2025

State of Michigan

MI

Subrecipient Monitoring Internal Control / Segregation of Duties Allowable Costs / Cost Principles § 200.303

Finding 2025-027 Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027 - Salesforce Security Management and Access Controls Management Views MSF agrees that Salesforce was not written as an exception in the identified policy but disagrees that there is a control deficiency. MSF maintains eff...

Finding 2025-027 Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027 - Salesforce Security Management and Access Controls Management Views MSF agrees that Salesforce was not written as an exception in the identified policy but disagrees that there is a control deficiency. MSF maintains effective controls within its control environment that effectively mitigate risks associated with exempting Salesforce from the identified policy and provide reasonable assurance MSF is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of federal awards. Planned Corrective Action Based on the factors that led MSF to exempt Salesforce from SECU.01.020.01 (Access Control Standard), including risk assessments and MSF’s existing control environment, Salesforce will be included in the policy as a written exception. Anticipated Completion Date September 30, 2026 Responsible Individual(s) Alex Fox, MSF Ian McCorvie, MSF Calvin Myers, MSF William Chaffee, MSF

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Finding 1218514 (2025-026)

Material Weakness 2025

State of Michigan

MI

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

Finding 2025-026 Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027 - Insufficient Respite Payment Controls Management Views MDHHS agrees with the finding. Planned Corrective Action MDHHS implemented a post payment review process for the final respite payments issued through the Medical S...

Finding 2025-026 Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027 - Insufficient Respite Payment Controls Management Views MDHHS agrees with the finding. Planned Corrective Action MDHHS implemented a post payment review process for the final respite payments issued through the Medical Services Administration Manual Payment System during fiscal year 2025 and finalized the review during fiscal year 2026, noting no improper payments. As all respite payments concluded at the end of fiscal year 2025, this review is no longer applicable moving forward. Anticipated Completion Date Completed Responsible Individual(s) Crystal Kline, MDHHS

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Finding 1218513 (2025-025)

Material Weakness 2025

State of Michigan

MI

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

Finding 2025-025 Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027 - PTMS Security Management and Access Controls Management Views MDOT agrees that security management and access controls should be fully established for the Public Transportation Management System (PTMS). Planned Correcti...

Finding 2025-025 Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027 - PTMS Security Management and Access Controls Management Views MDOT agrees that security management and access controls should be fully established for the Public Transportation Management System (PTMS). Planned Corrective Action Because PTMS is a legacy system that is being retired, MDOT will not re-create historical user data that was deleted due to a system limitation. Rather, MDOT EIM and the MDOT Office of Passenger Transportation (OPT) will collaborate and provide oversight to ensure that the new system, the Public Transportation Information Management System (PTIMS), which is scheduled for full implementation August 31, 2026, has fully established security management and access controls and that there is pertinent documentation regarding users’ roles. Also, EIM and OPT will continue to ensure that PTMS, and PTIMS after its implementation, user access is reviewed at least annually in accordance with SOM Technical Standard 1340.00.040.01 (Audit and Accountability Standard). Under the existing process, the designated system security administrators obtain, verify, and document the written approval for all identified users, and access is modified/removed timely and as appropriate based on responses received or removed when no response is received. Anticipated Completion Date September 2026 Responsible Individual(s) Sandy Lovell, MDOT Gina Huhn, MDOT Jean Ruestman, MDOT Kyle Nelson, MDOT Andy Esch, MDOT

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Finding 1218512 (2025-024)

Material Weakness 2025

State of Michigan

MI

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

Finding 2025-024 Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027 - MiSSG Security Management and Access Controls Management Views MiLEAP agrees with the finding. Planned Corrective Action For part a., for the exceptions noted in the finding, MiLEAP had the contractors complete the acce...

Finding 2025-024 Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027 - MiSSG Security Management and Access Controls Management Views MiLEAP agrees with the finding. Planned Corrective Action For part a., for the exceptions noted in the finding, MiLEAP had the contractors complete the access forms and has approved their access. MiLEAP also updated its procedures to ensure that contractors complete the Michigan Student Aid Scholarships and Grants (MiSSG) access forms before access is granted to the system. For part b., MiLEAP updated its procedures to ensure that it maintains sufficient documentation of its recertification review of internal users. Anticipated Completion Date Completed Responsible Individual(s) Diann Cosme, MiLEAP

View Audit 404775

Finding 1218511 (2025-023)

Material Weakness 2025

State of Michigan

MI

Subrecipient Monitoring Allowable Costs / Cost Principles Cash Management § 200.303

Finding 2025-023 Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027 - EGrAMS Security Management and Access Controls Management Views LEO agrees with the finding. Planned Corrective Action For part a., LEO has a process to maintain documentation and support for internal users. For externa...

Finding 2025-023 Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027 - EGrAMS Security Management and Access Controls Management Views LEO agrees with the finding. Planned Corrective Action For part a., LEO has a process to maintain documentation and support for internal users. For external users, LEO will ask the vendor to upgrade the system so it logs every external user activation, including the approving LEO staff member’s name and the timestamp, rather than overwriting previous external user activation records. For part b., LEO established a user reconciliation process in March 2026 that will be managed by the LEO Grants Division. For part c., LEO will change its policy requiring the disablement of user accounts inactive for over 60 days to comply with SOM Technical Standard 1340.00.020.01 (Access Control Standard). LEO will work with DTMB to complete a system security plan so user accounts will be automatically deactivated after 60 days of inactivity. LEO will also explore options to address the issue of EGrAMS users who typically only access the system every 90 days to complete required system reports. Anticipated Completion Date a. December 31, 2026 b. Completed c. December 31, 2026 Responsible Individual(s) Jason Hamblin, LEO

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Finding 1218510 (2025-022)

Material Weakness 2025

State of Michigan

MI

Internal Control / Segregation of Duties Subrecipient Monitoring Allowable Costs / Cost Principles § 200.303

Finding 2025-022 Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027 - Concur Security Management and Access Controls Management Views The Michigan Strategic Fund (MSF) agrees that Concur was not written as an exception in the identified policy but disagrees that there is a control deficie...

Finding 2025-022 Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027 - Concur Security Management and Access Controls Management Views The Michigan Strategic Fund (MSF) agrees that Concur was not written as an exception in the identified policy but disagrees that there is a control deficiency. MSF maintains effective controls within its control environment that effectively mitigate risks associated with exempting Concur from the identified policy and provide reasonable assurance MSF is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of federal awards. Planned Corrective Action Based on the factors that led MSF to exempt Concur from SECU.01.020.01 (Access Control Standard), including risk assessments and MSF’s existing control environment, Concur will be included in the policy as a written exception. Anticipated Completion Date September 30, 2026 Responsible Individual(s) Alex Fox, MSF Ian McCorvie, MSF Calvin Myers, MSF William Chaffee, MSF

View Audit 404775

Finding 1218509 (2025-021)

Material Weakness 2025

State of Michigan

MI

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

Finding 2025-021 Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027 - AASHTOWare Security Management and Access Controls Management Views MDOT agrees it did not fully establish effective security management and access controls over the American Association of State Highway and Transportat...

Finding 2025-021 Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027 - AASHTOWare Security Management and Access Controls Management Views MDOT agrees it did not fully establish effective security management and access controls over the American Association of State Highway and Transportation Officials software (AASHTOWare) users. Planned Corrective Action For part a., the MDOT Office of Enterprise Information Management (EIM), Bureau of Field Services-Construction Field Services Division, and Bureau of Development-Design Division will collaborate and provide oversight to ensure that internal user access for AASHTOWare is reviewed at least annually. MDOT will implement an improved process, which will be facilitated by the designated system security administrators, to ensure an internal user review at least annually. For part b., MDOT worked with DTMB in May 2026 to correct and enhance the auto-disabler function of the AASHTOWare program. In addition, MDOT will continue to monitor this functionality as part of its improved access control process to ensure users who have not accessed AASHTOWare within 365 days for internal user accounts and 18 months for external user accounts are disabled timely. Anticipated Completion Date a. September 30, 2026 b. Completed Responsible Individual(s) Mark Shulick, MDOT Dan Burns, MDOT Kristin Schuster, MDOT Dee Parker, MDOT Lindsey Renner, MDOT Jason Gutting, MDOT Kyle Nelson, MDOT Andy Esch, MDOT

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Finding 1218504 (2025-059)

Material Weakness 2025

State of Michigan

MI

Subrecipient Monitoring Reporting Internal Control / Segregation of Duties § 200.303

Finding 2025-059 Airport Improvement Program, Infrastructure Investment and Jobs Act Programs, and COVID-19 Airports Programs, ALN 20.106 Management Views MDOT agrees that it did not ensure revenues and program income generated by non-commercial airports were expended for airport capital or operatin...

Finding 2025-059 Airport Improvement Program, Infrastructure Investment and Jobs Act Programs, and COVID-19 Airports Programs, ALN 20.106 Management Views MDOT agrees that it did not ensure revenues and program income generated by non-commercial airports were expended for airport capital or operating costs, the local airport system, or other local facilities. Planned Corrective Action MDOT will review existing procedures, including the MDOT Office of Aeronautics Project Manager/Engineering Manual and block grant conditions, to assess whether updates are needed and if resources will be prioritized to help ensure monitoring and oversight efforts are performed relating to revenue and program income requirements. Anticipated Completion Date September 30, 2026 Responsible Individual(s) Bryan Budds, MDOT

View Audit 404775

Finding 1218503 (2025-058)

Material Weakness 2025

State of Michigan

MI

Reporting Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties § 200.303 § 200.326

Finding 2025-058 Airport Improvement Program, Infrastructure Investment and Jobs Act Programs, and COVID-19 Airports Programs, ALN 20.106 Management Views MDOT agrees that it did not ensure weekly certified payrolls were obtained from contractors. Planned Corrective Action MDOT will provide training...

Finding 2025-058 Airport Improvement Program, Infrastructure Investment and Jobs Act Programs, and COVID-19 Airports Programs, ALN 20.106 Management Views MDOT agrees that it did not ensure weekly certified payrolls were obtained from contractors. Planned Corrective Action MDOT will provide training and guidance to pertinent staff to help ensure contract compliance and that weekly certified payrolls are obtained from contractors. In addition, MDOT will review existing procedures to assess whether updates are needed. Anticipated Completion Date September 30, 2026 Responsible Individual(s) Bryan Budds, MDOT

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Finding 1218479 (2025-062)

Material Weakness 2025

State of Michigan

MI

Subrecipient Monitoring

Finding 2025-062 Child and Adult Care Food Program, ALN 10.558 Management Views MDE agrees with the finding. The COVID-19 SOM travel ban in fiscal year 2020 and MDE being short staffed disrupted the Child and Adult Care Food Program (CACFP) review cycle and contributed to the Review Master Spreadshe...

Finding 2025-062 Child and Adult Care Food Program, ALN 10.558 Management Views MDE agrees with the finding. The COVID-19 SOM travel ban in fiscal year 2020 and MDE being short staffed disrupted the Child and Adult Care Food Program (CACFP) review cycle and contributed to the Review Master Spreadsheet being out of date. Due to the review cycle disruption and extended time frame between reviews, sponsors who had reviews due from 2020 onward were higher risk even if there were no previous serious management problems, fast growth, or other risk factors identified under federal regulation 7 CFR 226.6(m)(6). Planned Corrective Action MDE CACFP staff have worked diligently while short staffed to prioritize reviews out of compliance with the established two-to-three-year rotation per federal regulation 7 CFR 226.6 (m)(6). Reviews completed in fiscal year 2025 targeted reviews out of compliance. For fiscal year 2026, reviews that were to be completed from 2017 through 2020 have been prioritized as higher risk based on the duration between reviews. To complete the reviews more quickly, the MDE Office of Nutrition Services has published an RFP for review contractors to complete out of compliance reviews in all MDE federal nutrition programs. The RFP closed May 8, 2026, with a projected start date of June 2026. The end date is to be determined based on the candidate selected and scope of contract. Currently, progress towards the completion of the fiscal year reviews is discussed biweekly during analyst and departmental manager updates and is monitored quarterly by the departmental manager through completion of the 33 1/3 report. This report indicates that the state agency is working towards the completion of reviews on 33 1/3 of its actively participating sponsors each fiscal year. The departmental manager shares this information with the analyst staff and the MDE CACFP supervisor to ensure the unit is on track with regulations. MDE CACFP has reinstated its current policy and procedure for review prioritization for fiscal year 2026 and expects reviews to be back in compliance with the two-to-three-year rotation by September 30, 2028. MDE created a new application analyst position to assist the departmental manager with program integrity and quality control and MDE is currently in the hiring process. Currently analysts, working with their departmental manager, are prioritizing and triaging reviews in their assigned territory based on length since prior review, along with other high-risk factors. Ongoing, the risk factor(s) of sponsors will be assessed annually by each analyst with input from the departmental manager in an end of fiscal year planning meeting for the upcoming fiscal year review schedule. The risk factor(s) will be entered into the Review Master Spreadsheet by the analysts and monitored for quality control by the new application analyst and the departmental manager quarterly. While the Review Master Spreadsheet was out of date, the fiscal year 2025 completed reviews were recorded in the MDE CACFP review compliance system, GEMS/MARS. The current departmental manager was using this system to generate the GEMS/MARS fiscal year 2025 Review Status report to track compliance. This report shows that although the Review Master Spreadsheet was out of date, reviews had been completed. MDE is currently using the Review Status report to restore fiscal year 2025 on the Review Master Spreadsheet, along with the individual reviewer spreadsheets, and anticipates updates will be completed by September 30, 2026. For ongoing maintenance, analysts and/or the departmental manager will enter the reviews completed on an ongoing basis as reviews are completed and they will be reviewed for quality control by the new application analyst and departmental manager quarterly. Anticipated Completion Date September 30, 2028 Responsible Individual(s) Melissa Lonsberry, MDE Lynn Cavett, MDE

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Finding 1218449 (2025-001)

Material Weakness 2025

Summit County Colorado

CO

Subrecipient Monitoring Eligibility Significant Deficiency

Federal Agency Name: U.S. Department of Health and Human Services Passed-through Colorado Department of Health Care Policy and Financing Program Name: Medical Assistance Program FFAL # 93.778 Initial Fiscal Year Finding Occurred: 2024 Finding Summary: The Federal requirement related to processing of...

Federal Agency Name: U.S. Department of Health and Human Services Passed-through Colorado Department of Health Care Policy and Financing Program Name: Medical Assistance Program FFAL # 93.778 Initial Fiscal Year Finding Occurred: 2024 Finding Summary: The Federal requirement related to processing of an application requires the State to provide notice of its decision concerning eligibility and provide timely and adequate notice of the basis for denial or termination of assistance (42 USC 1320c-7(d)). According to the Colorado Department of Health Care Policy and Financing (HCPF), processing standards 8.100.3.D, the County is required to process an initial application for any program not requiring a disability determination no later than 45 days following receipt of application. Our auditors, Eide Bailly, tested eligibility determination and controls over this process for sixty case files. They noted the following in our testing: • Two instances of non-compliance in which the County did not complete the eligibility determination and approve/deny the case within 45 days, and no notice of action was sent to the client within the required timeframe. • Two instances of non-compliance in which it could not be verified whether the notice of action was sent by the County to the client via mail or email Responsible Individuals: Joanne Sprouse, Human Services Director Corrective Action Plan: Summit County Human Services implemented multiple procedures in response to the prior 2024 findings. Those corrective action responses were still in process for the current 2025 period tested and will continue into 2026. During 2025, Summit County Human Services successfully retrained all case managers on application processing protocols, utilizing stateapproved training modules administered through the Staff Development Department. Summit County Human Services strictly follows state-mandated guidelines for processing Medical Assistance applications to ensure that all cases are approved or denied within the 45-day timeframe established by state regulations. To further enhance the accuracy of eligibility determinations for all household members, case managers have also completed the "Case Wrap-Up Training" through CoLearn, an online training platform developed by the State's Staff Development Department. Completion of this training ensures that eligibility determinations are accurate, and that appropriate client correspondence is issued. In 2025 and continuing into 2026, Summit County Human Services has also implemented a weekly review of the county dashboards, specifically the “HCPF Application Timeliness” and “HCPF Renewal Timeliness” dashboards. These dashboards monitor Medicaid application and renewal processing timelines initiated upon receipt by our office. In addition to the dashboard reviews, management meets weekly with the case managers responsible for monitoring the dashboards to identify trends and determine training needs. Furthermore, an additional line was added to the case comment template to ensure review and verification of correct case correspondence issuance. Anticipated Completion Date: Ongoing

View Audit 404737

Finding 1218416 (2025-006)

Material Weakness 2025

Evangeline Booth Residence, Inc., A Florida Corporation

FL

HUD Housing Programs Special Tests & Provisions Subrecipient Monitoring

6. Finding 2025-006 a. Comments on the Finding and Each Recommendation The auditee agrees with the finding. The auditee agrees with the recommendation to change its policies and procedures related to refunding of tenant security deposits to comply with the thirty-day timeline required by HUD regulat...

6. Finding 2025-006 a. Comments on the Finding and Each Recommendation The auditee agrees with the finding. The auditee agrees with the recommendation to change its policies and procedures related to refunding of tenant security deposits to comply with the thirty-day timeline required by HUD regulations. b. Action(s) Taken or Planned on the Finding Management agrees with the finding and is taking steps to address the issue that caused it. Management is still reviewing and updating the processes and procedures with site personnel to strengthen controls over the refunding of tenant security deposits.

View Audit 404683

Finding 1218389 (2025-003)

Material Weakness 2025

Evangeline Booth Friendship House Residence Inc., A Texas Corporation

TX

HUD Housing Programs Special Tests & Provisions Subrecipient Monitoring

3. Finding 2025-003 a. Comments on the Finding and Each Recommendation The auditee agrees with the finding. The auditee agrees with the recommendation to change its policies and procedures related to refunding of tenant security deposits to comply with the thirty-day timeline required by HUD regulat...

3. Finding 2025-003 a. Comments on the Finding and Each Recommendation The auditee agrees with the finding. The auditee agrees with the recommendation to change its policies and procedures related to refunding of tenant security deposits to comply with the thirty-day timeline required by HUD regulations. b. Action(s) Taken or Planned on the Finding We will review the processes and procedures with site personnel to strengthen controls over the refunding of tenant security deposits.

View Audit 404678

Finding 1218317 (2025-002)

Material Weakness 2025

Housing Authority of the City of Greenville

NC

HUD Housing Programs Subrecipient Monitoring Eligibility

Finding 2025-002 – Public and Indian Housing Participant Files – Eligibility – Internal Control over Participant Files – Noncompliance and Material Weakness – Public and Indian Housing Program – ALN 14.850 1. Standardized Eligibility Checklist A comprehensive eligibility checklist will be developed ...

Finding 2025-002 – Public and Indian Housing Participant Files – Eligibility – Internal Control over Participant Files – Noncompliance and Material Weakness – Public and Indian Housing Program – ALN 14.850 1. Standardized Eligibility Checklist A comprehensive eligibility checklist will be developed and required for all participant files. This checklist will ensure all required documents (income verification, identification, citizenship status, etc.) are obtained, reviewed, and properly filed before approval. Please see the above attachment regarding the checklist. 2. File Review & Approval Process All resident files will undergo a two-tier review process: • Initial review by the assigned staff member • Secondary review and approval by a supervisor prior to final eligibility determination No file will Be approved without documented supervisory sign-off. 3. Staff Training All staff responsible for eligibility determinations will receive mandatory training on: • Program eligibility requirements • Proper documentation standards • File organization and recordkeeping procedures Refresher training will be conducted annually or as regulations change. 4. Internal Quality Control Audits Monthly random file audits will be conducted to ensure compliance with eligibility requirements and documentation standards. Findings will be documented, and corrective feedback will be provided to staff by supervisor. 5. Written Policies & Procedures Update The agency has updated its written policies and procedures manual to include: • Step-by-step eligibility determination processes • Documentation requirements • File retention and organization standards • Quality control measures All staff will be required to acknowledge and follow updated procedures. 6. File Organization Standardization All resident files (physical and/or electronic) will follow a uniform structure to ensure consistency, accessibility, and completeness. 7. Tracking & Monitoring System A tracking system (manual log or software-based) will be implemented to monitor: • Missing documents • Pending verifications • File status (intake, review, approved) Person Responsible- Shanetta Moye, Deputy Director/COO Anticipated Completion Date - September 30, 2026

View Audit 404556

Finding 1218314 (2025-002)

Material Weakness 2025

American Academy McAllister Institute of Funeral Service, Inc.

NY

Student Financial Aid Special Tests & Provisions Subrecipient Monitoring

In May of 2026, the Institute amended its procedures to (1) require the printing of a schedule of student balances after application of Federal Pell Grant and Loan receipts and (2) for all students with a credit balance within 12 days of the Pell receipt indicating the check number and date of the r...

In May of 2026, the Institute amended its procedures to (1) require the printing of a schedule of student balances after application of Federal Pell Grant and Loan receipts and (2) for all students with a credit balance within 12 days of the Pell receipt indicating the check number and date of the refund to the student on this schedule. This schedule is then to be reviewed for adherence to the required 14-day refund requirement under the Pell program by another staff member.

View Audit 404554

Finding 1218313 (2025-001)

Material Weakness 2025

American Academy McAllister Institute of Funeral Service, Inc.

NY

Student Financial Aid Special Tests & Provisions Subrecipient Monitoring

As reported in the Institutes fiscal 2024 Corrective Action Plan, in May 2025, the Institute revised its current procedures to include having an employee independent from the exit conference process review that any student not enrolled in a new semester or that is enrolled at less than half time sta...

As reported in the Institutes fiscal 2024 Corrective Action Plan, in May 2025, the Institute revised its current procedures to include having an employee independent from the exit conference process review that any student not enrolled in a new semester or that is enrolled at less than half time status has received proper exit conferencing and that exit conferencing has been properly documented. Two of the findings in the current fiscal 2025 occurred prior to the May revision by the Institute of its procedures. The third finding occurred during a period that the independent party performing the review function was on leave due to a death in the family. The Institute recognizes the importance of ensuring that exit conferences are performed timely and properly documented. Management has met with its staff involved in this process to emphasize its importance. Additionally, an additional staff member has been assigned to perform the review procedures if the staff member responsible is not available to timely perform the procedures.

View Audit 404554

Finding 1218310 (2025-004)

Material Weakness 2025

Dona Ana County

NM

Subrecipient Monitoring

Views of Responsible Officials and Planned Corrective Action The grant administrator for this project retired last year and the current Jetport staff were unable to locate past reports for the requested timeframe. DFA did not respond with any pertinent information. This project was completed in Marc...

Views of Responsible Officials and Planned Corrective Action The grant administrator for this project retired last year and the current Jetport staff were unable to locate past reports for the requested timeframe. DFA did not respond with any pertinent information. This project was completed in March 2025, and all drawdowns were completed by June 30, 2025. The County agrees with the recommendation that Jetport strengthen its internal controls over grant compliance by implementing formal procedures to ensure timely preparation, review, and submission of all required reports. Current Jetport staff have reviewed the process of submitting these reports and will help ensure this does not occur in the future. Management recognizes its responsibility to establish and maintain centralized record retention practices for all grant documentation and implement cross-training or supervisory review processes to mitigate the risk of noncompliance due to staff turnover. We agree with the recommendation and are establishing a centralized grant office and will consistently train the grant administrators that will affect grant accounting reconciliations and oversight. Finding resolution timeline: December 1, 2026 Designation of employee position responsible for meeting this deadline: Jetport Manager, Grants Manager, Grant Accountant

View Audit 404551

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