Corrective Action Plans

Finding 1191992 (2025-050)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Reporting

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

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

View Audit 395688

Finding 1191973 (2025-038)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Allowable Costs / Cost Principles Questioned Costs Subrecipient Monitoring

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

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

View Audit 395688

Finding 1191971 (2025-037)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

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

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

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

View Audit 395688

Finding 1191966 (2025-032)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring

Finding Number: 2025-032 Finding: The Department of Commerce did not have adequate internal controls over and did not comply with federal requirements to ensure subrecipients of the Low-Income Home Energy Assistance program received required single audits, and that it appropriately followed up on fi...

Finding Number: 2025-032 Finding: The Department of Commerce did not have adequate internal controls over and did not comply with federal requirements to ensure subrecipients of the Low-Income Home Energy Assistance program received required single audits, and that it appropriately followed up on findings and issued management decisions. Program: 93.568 – Low-Income Home Energy Assistance Program Compliance Requirement: Subrecipient Monitoring Questioned Costs: $0 Status: Corrective action complete Corrective Action: The Department disagrees with the issues reported in the finding. The Department concludes that the deficiencies reported were not supported by requirements included in the Code of Federal Regulations (CFR) but were based on the State Auditor’s Office’s preferences. In October 2024, the Internal Controls Office (ICO) added a Management Analyst 5 dedicated to ensuring the requirements in 2 CFR 200.501 Audit Requirements are followed. The ICO also updated processes to ensure compliance with subrecipient monitoring requirements. The ICO maintains that key controls are in place and materially complied with all compliance requirements regarding monitoring subrecipients’ single audit submissions. The ICO will continue to issue management decision letters as required and communicate subrecipients’ non-compliance issues to program management. Prior Findings: The conditions noted in this finding were previously reported in finding 2024-055. Completion Date: July 2025 Agency Contact: Gena Allen, CFE Internal Control Officer (360) 480-5149 Gena.Allen@Commerce.wa.gov

View Audit 395688

Finding 1191965 (2025-031)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Reporting

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

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

View Audit 395688

Finding 1191964 (2025-030)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Allowable Costs / Cost Principles Period of Performance

Finding Number: 2025-030 Finding: The Department of Commerce improperly charged $131,015 to the Low-Income Home Energy Assistance Program. Program: 93.568 – Low-Income Home Energy Assistance Program Compliance Requirement: Period of Performance Questioned Costs: $131,015 Status: Corrective action in...

Finding Number: 2025-030 Finding: The Department of Commerce improperly charged $131,015 to the Low-Income Home Energy Assistance Program. Program: 93.568 – Low-Income Home Energy Assistance Program Compliance Requirement: Period of Performance Questioned Costs: $131,015 Status: Corrective action in progress Corrective Action: The Department agrees that internal controls should be strengthened for the review and approval of administrative expenses. The Low-Income Home Energy Assistance Program (LIHEAP) management is working with accounting, budget, and the internal controls departments to create a process and workflow in which all LIHEAP administrative expenditures are reported, reviewed, and approved to ensure all expenditures are within the applicable period of performance and are adequately documented. However, the Department disagrees with the questioned costs identified in the finding and maintains that they were expended in compliance with the Code of Federal Regulations and the guidance provided by the U.S. Department of Health and Human Services (HHS). The Department will consult with HHS on the questioned costs identified in the finding. Prior Findings: The conditions noted in this finding were previously reported in finding 2024-050. Completion Date: Estimated September 2026 Agency Contact: Gena Allen, CFE Internal Control Officer (360) 480-5149 Gena.Allen@Commerce.wa.gov

View Audit 395688

Finding 1191963 (2025-029)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Cash Management

Finding Number: 2025-029 Finding: The Department of Commerce did not have adequate internal controls over and did not comply with the Cash Management Improvement Act requirements for the Low-Income Home and Energy Assistance Program. Program: 93.568 – Low-Income Home Energy Assistance Program Compli...

Finding Number: 2025-029 Finding: The Department of Commerce did not have adequate internal controls over and did not comply with the Cash Management Improvement Act requirements for the Low-Income Home and Energy Assistance Program. Program: 93.568 – Low-Income Home Energy Assistance Program Compliance Requirement: Cash Management Questioned Costs: $0 Status: Corrective action in progress Corrective Action: The Department is in the process of implementing a procedure to comply with the requirements of the Cash Management Improvement Act. In addition, the Department will seek approval from the Department of Health and Human Services for any draws necessary outside of the draw schedule included in the Act. Prior Findings: None Completion Date: Estimated May 2026 Agency Contact: Gena Allen, CFE Internal Control Officer (360) 480-5149 Gena.Allen@Commerce.wa.gov

View Audit 395688

Finding 1191962 (2025-028)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring

Finding Number: 2025-028 Finding: The Department of Social and Health Services did not have adequate internal controls over and did not comply with federal and departmental requirements to perform fiscal and program monitoring of subrecipients for the Refugee and Entrant Assistance programs. Program...

Finding Number: 2025-028 Finding: The Department of Social and Health Services did not have adequate internal controls over and did not comply with federal and departmental requirements to perform fiscal and program monitoring of subrecipients for the Refugee and Entrant Assistance programs. Program: 93.566 – Refugee and Entrant Assistance State/Replacement Designee Administered Programs Compliance Requirement: Subrecipient Monitoring Questioned Costs: $0 Status: Corrective action in progress Corrective Action: The Department concurs with the auditor’s findings. The Department’s Office of Refugee and Immigrant Assistance (ORIA) is committed to immediately implementing the following corrective actions to strengthen internal controls and ensure full compliance with all monitoring requirements. As of January 2026, the Department revised ORIA program monitoring procedures to clearly define: • A mandatory checklist for all program monitoring activities. • Non-negotiable standards for subrecipients to identify which clients received direct assistance versus other services so required monitoring can be completed. • Required documentation standards for all caseload reviews. • Required follow-up with subrecipients on missing, incomplete, or unclear caseload reports and ensure any issues are corrected. As of February 2026, the Department developed and delivered mandatory training for all ORIA program monitoring staff on the revised procedures, focusing specifically on: • Proper caseload report review, retention, and verification procedures. • The new documentation standards for tracking all services and assistance. By April 2026, the Department will implement a secondary quality assurance (QA) step where an administrator or designated QA officer must review and sign off on a monthly sample of all completed subrecipient caseload reviews. The first monthly sample will occur for monitoring conducted in March 2026. By May 2026, the Department will perform additional reviews of the 53 caseload reports identified in the audit finding to verify eligibility, document completion of the review, and follow up on any exceptions identified. Prior Findings: The conditions noted in this finding were previously reported in findings 2024-047 and 2023-054. Completion Date: Estimated May 2026 Agency Contact: Richard Meyer External Audit Compliance Manager Richard.Meyer@dshs.wa.gov

View Audit 395688

Finding 1191961 (2025-027)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring

Finding Number: 2025-027 Finding: The Department of Social and Health Services did not have adequate internal controls to ensure it filed reports on time as required by the Federal Funding Accountability and Transparency Act for the Refugee and Entrant Assistance program. Program: 93.566 – Refugee a...

Finding Number: 2025-027 Finding: The Department of Social and Health Services did not have adequate internal controls to ensure it filed reports on time as required by the Federal Funding Accountability and Transparency Act for the Refugee and Entrant Assistance program. Program: 93.566 – Refugee and Entrant Assistance State/Replacement Designee Administered Programs Compliance Requirement: Reporting Questioned Costs: $0 Status: Corrective action complete Corrective Action: The Department concurs with the auditor’s findings. In response to the 2024 audit finding, the Department implemented a process change to ensure timely and accurate reporting and ongoing compliance with the Federal Funding Accountability and Transparency Act (FFATA) reporting requirements. As of April 2025, the Department: • Transitioned the subaward reporting responsibility from the Division of Finance and Financial Resources accounting team to the Office of Refugee and Immigrant Assistance (ORIA) program staff. This change aligned the reporting duty with the source of program data for reporting. • Completed a full audit upon receiving the new workload and filed all past-due reports. • Designated and trained a primary and a backup staff member within the program to collect and report the required information for each subaward. • Created a verification process to ensure subawards and subaward amendments are completed accurately and reported timely. As of October 2025, the staff services and operations consultant conducts a quarterly check-in with ORIA to ensure all FFATA submissions have been submitted timely. The corrective actions were implemented near the end of the audit period, resulting in a repeat finding in fiscal year 2025. The full impact of the corrective actions will be evident in the fiscal year 2026 audit. Prior Findings: The conditions noted in this finding were previously reported in findings 2024-046 and 2023-052. Completion Date: October 2025 Agency Contact: Richard Meyer External Audit Compliance Manager Richard.Meyer@dshs.wa.gov

View Audit 395688

Finding 1191960 (2025-026)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Allowable Costs / Cost Principles Internal Control / Segregation of Duties Questioned Costs

Finding Number: 2025-026 Finding: The Department of Social and Health Services did not have adequate internal controls to ensure only eligible clients received cash benefits under the Refugee and Entrant Assistance program and improperly charged $4,440 to the program. Program: 93.566 – Refugee and E...

Finding Number: 2025-026 Finding: The Department of Social and Health Services did not have adequate internal controls to ensure only eligible clients received cash benefits under the Refugee and Entrant Assistance program and improperly charged $4,440 to the program. Program: 93.566 – Refugee and Entrant Assistance State/Replacement Designee Administered Programs Compliance Requirement: Eligibility Questioned Costs: $4,440 Status: Corrective action in progress Corrective Action: The Department concurs with the finding. As of October 2025, the Department requested the ESA Management Analytics and Performance Statistics (EMAPS) team to generate a report detailing all eligibility determinations made in the six weekly periods that were found to be lacking managerial review. As of November 2025, the Department submitted a formal EMAPS work request to develop a Refugee Cash Assistance (RCA) flagged eligibility caseload report. In addition to metrics already reviewed, this report includes a metric to flag cases where the “U.S. entry date” field has been modified. As of January 2026, the Department: • Developed, documented, and implemented a comprehensive process for managerial reviews of flagged eligibility caseload reports, including a backup process in the absence of the primary reviewer. • Developed and implemented a formal oversight process to monitor the completion and documentation of managerial reviews of all flagged eligibility caseload reports. This process will include a recurring check or log to ensure 100% compliance. • Revised the existing RCA desk aid to provide additional training and guidance to eligibility staff, clarifying the appropriate determination of the RCA eligibility period. The desk aid will specifically include instructions that staff are not to change the original date entered in the “U.S. entry date” field when a client leaves and reenters the country. As of March 2026, the Department reviewed the EMAPS reports to identify and correct any eligibility determination errors. By April 2026, the Department will develop and implement a tracking method to ensure all appropriate eligibility staff are trained on the revised RCA desk aid to ensure alignment with policy and procedures. If the grantor contacts the Department regarding the questioned costs identified in this finding, the Department will consult with the grantor to determine whether repayment is required. Prior Findings: None Completion Date: Estimated April 2026 Agency Contact: Richard Meyer External Audit Compliance Manager Richard.Meyer@dshs.wa.gov

View Audit 395688

Finding 1191956 (2025-025)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Allowable Costs / Cost Principles Subrecipient Monitoring Questioned Costs

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

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

View Audit 395688

Finding 1191955 (2025-024)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring

Finding Number: 2025-024 Finding: The Department of Health did not have adequate internal controls over and did not comply with fiscal monitoring requirements for the Epidemiology and Laboratory Capacity for Infectious Diseases program. Program: 93.323 – Epidemiology and Laboratory Capacity for Infe...

Finding Number: 2025-024 Finding: The Department of Health did not have adequate internal controls over and did not comply with fiscal monitoring requirements for the Epidemiology and Laboratory Capacity for Infectious Diseases program. Program: 93.323 – Epidemiology and Laboratory Capacity for Infectious Diseases 93.323 – COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases Compliance Requirement: Subrecipient Monitoring Questioned Costs: $0 Status: Corrective action complete Corrective Action: The Department does not concur that the condition described on the finding constitutes a material weakness resulting in material noncompliance as defined under federal auditing standards. The description of condition on the finding does not present a reasonable possibility that a material misstatement of federal expenditures or material noncompliance would occur and not be detected in a timely manner. Subrecipient fiscal monitoring activities were performed during the audit period and internal controls supporting those activities were in place and operating. The issues identified by the auditors are primarily related to documentation practices within the internal tracking tools rather than a failure to perform monitoring or a breakdown of internal controls. The Department recognizes the opportunities to enhance documentation clarity and administrative consistency within its monitoring records. To further strengthen these administrative practices, the Department plans to implement the following process enhancements: • Update the current procedure to identify where it aligns with 2 CFR 200. • Identify key columns on the tracking tool that are integral to internal controls to eliminate confusion. Prior Findings: The conditions noted in this finding were previously reported in findings 2024-040, 2023-050, and 2022-033. Completion Date: March 2026 Agency Contact: Jeff Arbuckle External Audit Manager (360) 701-0798 Jeff.Arbuckle@doh.wa.gov

View Audit 395688

Finding 1191954 (2025-023)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Allowable Costs / Cost Principles

Finding Number: 2025-023 Finding: The Department of Health did not have adequate internal controls over and did not comply with requirements to ensure subrecipients of the Epidemiology and Laboratory Capacity for Infectious Diseases program received required single audits, and that it appropriately ...

Finding Number: 2025-023 Finding: The Department of Health did not have adequate internal controls over and did not comply with requirements to ensure subrecipients of the Epidemiology and Laboratory Capacity for Infectious Diseases program received required single audits, and that it appropriately followed up on findings and issued management decisions. Program: 93.323 – Epidemiology and Laboratory Capacity for Infectious Diseases 93.323 – COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases Compliance Requirement: Subrecipient Monitoring Questioned Costs: $0 Status: Corrective action in progress Corrective Action: The Department continues to work on strengthening the subrecipient single audit review process. Procedures will be formalized for tracking and reviewing subrecipients’ single audits, issuing management decisions timely, and following up on corrective actions. The Department will also ensure staff are accountable for implementing the identified procedures and will develop additional oversight to ensure compliance. Prior Findings: The conditions noted in this finding were previously reported in findings 2024-041 and 2023-049. Completion Date: Estimated December 2026 Agency Contact: Jeff Arbuckle External Audit Manager (360) 701-0798 Jeff.Arbuckle@doh.wa.gov

View Audit 395688

Finding 1191953 (2025-022)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Reporting Subrecipient Monitoring Allowable Costs / Cost Principles

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

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

View Audit 395688

Finding 1191952 (2025-021)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Allowable Costs / Cost Principles

Finding Number: 2025-021 Finding: The Department of Health did not have adequate internal controls to ensure payments to subrecipients were allowable and met cost principles for the Epidemiology and Laboratory Capacity for Infectious Diseases and the Immunization Cooperative Agreements programs. Pro...

Finding Number: 2025-021 Finding: The Department of Health did not have adequate internal controls to ensure payments to subrecipients were allowable and met cost principles for the Epidemiology and Laboratory Capacity for Infectious Diseases and the Immunization Cooperative Agreements programs. Program: 93.268 – Immunization Cooperative Agreements 93.268 – COVID-19 Immunization Cooperative Agreements 93.323 – Epidemiology and Laboratory Capacity for Infectious Diseases 93.323 – COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Subrecipient Monitoring Questioned Costs: $0 Status: Corrective action in progress Corrective Action: The Department will strengthen internal controls over subrecipient payments by formalizing the approval and communication process between program and accounting staff. Specifically, the Department will: • Provide additional staff training on the requirement of documenting program review and approval of subrecipient payment requests in program files. • Standardize procedures for programs to communicate payment approval to the accounting unit before issuing payments. Prior Findings: The conditions noted in this finding were previously reported in findings 2024-037, 2024-032, 2023-046, 2023-044, 2022-033, and 2022-031. Completion Date: Estimated May 2026 Agency Contact: Jeff Arbuckle External Audit Manager (360) 701-0798 Jeff.Arbuckle@doh.wa.gov

View Audit 395688

Finding 1191951 (2025-006)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Allowable Costs / Cost Principles Cash Management Questioned Costs

Finding Number: 2025-006 Finding: The Department of Health did not have adequate internal controls over cash management for the Epidemiology and Laboratory Capacity for Infectious Diseases, the Immunization Cooperative Agreements and the WIC Special Supplemental Nutrition Program for Women, Infants,...

Finding Number: 2025-006 Finding: The Department of Health did not have adequate internal controls over cash management for the Epidemiology and Laboratory Capacity for Infectious Diseases, the Immunization Cooperative Agreements and the WIC Special Supplemental Nutrition Program for Women, Infants, and Children programs. Program: 10.557 – WIC Special Supplemental Nutrition Program for Women, Infants, and Children 93.268 – Immunization Cooperative Agreements 93.268 – COVID-19 Immunization Cooperative Agreements 93.323 – Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) 93.323 – COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Compliance Requirement: Cash Management Questioned Costs: $160,206 Status: Corrective action in progress Corrective Action: The Department is taking steps to strengthen internal controls over cash management and related system processes. During the audit period, the Department identified issues within the Grants Management System but were unable to implement system enhancements prior to the end of the audit period. The Department will continue to address these system issues to ensure compliance with federal requirements. Additionally, the Department will: • Review and strengthen controls over the accuracy and maintenance of accounting data used in cash draw calculations. • Improve review and monitoring procedures to ensure amounts used to support federal cash draws are accurate, complete, and supported by appropriate documentation. • Evaluate existing roles and responsibilities to ensure appropriate oversight, review, and segregation of duties related to cash management activities. The Department is reviewing the questioned costs identified by the auditors and will take appropriate action in accordance with federal requirements, which may include adjustments or repayment, as necessary. Prior Findings: The conditions noted in this finding were previously reported in findings 2024-036 and 2024-033. Completion Date: Estimated December 2026 Agency Contact: Jeff Arbuckle External Audit Manager (360) 701-0798 Jeff.Arbuckle@doh.wa.gov

View Audit 395688

Finding 1191936 (2025-019)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring

Finding Number: 2025-019 Finding: The Department of Commerce did not have adequate internal controls over and did not comply with requirements to perform program monitoring for subrecipients of the Coronavirus State and Local Fiscal Recovery Funds. Program: 21.027 – COVID-19 Coronavirus State and Lo...

Finding Number: 2025-019 Finding: The Department of Commerce did not have adequate internal controls over and did not comply with requirements to perform program monitoring for subrecipients of the Coronavirus State and Local Fiscal Recovery Funds. Program: 21.027 – COVID-19 Coronavirus State and Local Fiscal Recovery Funds Compliance Requirement: Subrecipient Monitoring Questioned Costs: $0 Status: Corrective action in progress Corrective Action: To ensure compliance with 2 CFR 200 the Coronavirus State and Local Fiscal Recovery Funds subrecipient monitoring requirements, the Local Government Division program staff will complete the following procedures: Infrastructure Program: • Require active subrecipients to submit a project status report with each reimbursement request before reviewing and approving the invoice for payment. State Broadband Office: • Obtain missing project status reports from subrecipients for the audit period. • Ensure all future invoice documents have a project status report submitted before approving payment, as required in the grantee agreements. Prior Findings: None Completion Date: Estimated April 2026 Agency Contact: Gena Allen, CFE Internal Control Officer (360) 480-5149 Gena.Allen@Commerce.wa.gov

View Audit 395688

Finding 1191935 (2025-018)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring

Finding Number: 2025-018 Finding: The Department of Commerce did not have adequate internal controls over and did not comply with requirements to perform risk assessments for subrecipients of the Coronavirus State and Local Fiscal Recovery Funds. Program: 21.027 – COVID-19 Coronavirus State and Loca...

Finding Number: 2025-018 Finding: The Department of Commerce did not have adequate internal controls over and did not comply with requirements to perform risk assessments for subrecipients of the Coronavirus State and Local Fiscal Recovery Funds. Program: 21.027 – COVID-19 Coronavirus State and Local Fiscal Recovery Fund Compliance Requirement: Subrecipient Monitoring Questioned Costs: $0 Status: Corrective action complete Corrective Action: The Infrastructure Program requires risk assessments to be completed for new subawards only. The Department will not be making any additional subawards to subrecipients under the Coronavirus State and Local Fiscal Recovery Fund (SLFRF) award because all funds were obligated as of December 31, 2024. The risk assessment requirement is no longer applicable for SLFRF. Prior Findings: The conditions noted in this finding were previously reported in findings 2024-022, 2023-031, and 2022-021. Completion Date: June 2025 Agency Contact: Gena Allen, CFE Internal Control Officer (360) 480-5149 Gena.Allen@Commerce.wa.gov

View Audit 395688

Finding 1191934 (2025-017)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Allowable Costs / Cost Principles

Finding Number: 2025-017 Finding: The Department of Commerce did not have adequate internal controls over and did not comply with federal requirements to ensure subrecipients of the Coronavirus State and Local Fiscal Recovery Funds received required single audits, and that it appropriately followed ...

Finding Number: 2025-017 Finding: The Department of Commerce did not have adequate internal controls over and did not comply with federal requirements to ensure subrecipients of the Coronavirus State and Local Fiscal Recovery Funds received required single audits, and that it appropriately followed up on findings and issued management decisions. Program: 21.027 – COVID-19 Coronavirus State and Local Fiscal Recovery Funds Compliance Requirement: Subrecipient Monitoring Questioned Costs: $0 Status: Corrective action complete Corrective Action: The Department partially agrees with the finding. The Department acknowledges that there were subrecipients who should have received management decision letters but were not identified during monitoring. Additional monitoring steps have been added to identify these entities. The Department concludes that the other deficiencies reported were not supported by requirements included in the Code of Federal Regulations (CFR) but were based on the State Auditor’s Office’s preferences. In October 2024, the Internal Controls Office (ICO) added a Management Analyst 5 dedicated to ensuring the requirements in 2 CFR 200.501 Audit Requirements are followed. The ICO also updated processes to ensure compliance with subrecipient monitoring requirements. The ICO maintains that key controls are in place and the Department materially complied with all compliance requirements regarding monitoring subrecipients’ single audit submissions. The ICO will continue to issue management decision letters as required and communicate subrecipients’ non-compliance issues to program management. Prior Findings: The conditions noted in this finding were previously reported in finding 2024-023. Completion Date: July 2025 Agency Contact: Gena Allen, CFE Internal Control Officer (360) 480-5149 Gena.Allen@Commerce.wa.gov

View Audit 395688

Finding 1191933 (2025-016)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Allowable Costs / Cost Principles Questioned Costs Subrecipient Monitoring

Finding Number: 2025-016 Finding: The Department of Corrections improperly charged $222 to the Coronavirus State and Local Fiscal Recovery Funds program. Program: 21.027 – COVID-19 Coronavirus State and Local Fiscal Recovery Funds Compliance Requirement: Activities Allowed or Unallowed and Allowable...

Finding Number: 2025-016 Finding: The Department of Corrections improperly charged $222 to the Coronavirus State and Local Fiscal Recovery Funds program. Program: 21.027 – COVID-19 Coronavirus State and Local Fiscal Recovery Funds Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Questioned Costs: $222 Status: Corrective action complete Corrective Action: The Department concurs that the questioned costs identified by the auditors were charged to the grant due to an employee’s overpayment. The Department is committed to ensuring compliance with federal grant requirements. In response to this audit finding, the Department: • Provided education to local payroll liaisons to ensure the Automated Time & Labor Advanced Scheduling (ATLAS) system checklist and standard processes are followed. • Reviewed the logic around shift differential in ATLAS and determined that the cause of the shift differential errors identified in the audit was the result of shifts not assigned to employees’ schedules. • Worked with the vendor to provide a report identifying employees whose shifts in ATLAS show a discrepancy that may affect shift differential overtime logic. The Department will discuss any repayment of questioned costs through the normal audit resolution process with the U.S. Department of the Treasury. Prior Findings: None Completion Date: November 2025 Agency Contact: Sandra Morrison Comptroller (360) 480-4596 svmorrison@doc1.wa.gov

View Audit 395688

Finding 1191856 (2025-015)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

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

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

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

View Audit 395688

Finding 1191854 (2025-014)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring

Finding Number: 2025-014 Finding: The Department of Transportation did not have adequate internal controls over and did not comply with requirements to perform risk assessments for subrecipients of the Highway Planning and Construction program. Program: 20.205 – Highway Planning and Construction Com...

Finding Number: 2025-014 Finding: The Department of Transportation did not have adequate internal controls over and did not comply with requirements to perform risk assessments for subrecipients of the Highway Planning and Construction program. Program: 20.205 – Highway Planning and Construction Compliance Requirement: Subrecipient Monitoring Questioned Costs: $0 Status: Corrective action complete Corrective Action: The Department is committed to ensuring its grant programs comply with federal regulations regarding subrecipient risk assessments. The responsibility for conducting risk assessments for subrecipients under the Federal Highway Administration grant programs primarily rests with the Department’s Regional Local Programs Engineers located in six regions across the state. The Department had plans to complete a risk assessment at each phase of a project; however, staff turnover contributed to the lack of consistency and timeliness in completing these assessments. The Department revised the risk assessment procedures in March 2022. As part of ongoing efforts and to help ensure consistency of the risk assessment process, the Department shared the audit findings and exceptions with regional staff and reminded them of the updated risk assessment program guidelines. The Department will continue to work with Regional Local Programs Engineers and regional management to ensure compliance with federal requirements. Prior Findings: The conditions noted in this finding were previously reported in findings 2024-012 and 2023-012. Completion Date: December 2025 Agency Contact: Jesse Daniels Audit Liaison (360) 705-7035 jesse.daniels@wsdot.wa.gov

View Audit 395688

Finding 1191853 (2025-012)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Eligibility Special Tests & Provisions

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

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

View Audit 395688

Finding 1191852 (2025-011)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Questioned Costs Allowable Costs / Cost Principles

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

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

View Audit 395688

Finding 1191849 (2025-009)

Material Weakness 2025

State of Washington C/o Office of Financial Management

WA

Reporting Internal Control / Segregation of Duties Subrecipient Monitoring

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

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

View Audit 395688

Corrective Action Plans

Filters