Corrective Action Plans

Finding 1175646 (2025-003)

Material Weakness 2025

NC

Subrecipient Monitoring Cash Management Material Weakness

Contact Person: Jeremy Teetor, Chief Financial Officer Corrective Action Plan: The finding resulted primarily from significant turnover within the Finance Department. Management has established procedures to ensure that all bank account and other required reconciliations are prepared on a timely bas...

Contact Person: Jeremy Teetor, Chief Financial Officer Corrective Action Plan: The finding resulted primarily from significant turnover within the Finance Department. Management has established procedures to ensure that all bank account and other required reconciliations are prepared on a timely basis going forward. The Finance department will also strive to keep key positions filled at all times and ensure that staff receives appropriate training regarding reconciliations. Proposed Completetion Date: Immediately

View Audit 389467

Finding 1175625 (2025-002)

Material Weakness 2025

National University

CA

Student Financial Aid Subrecipient Monitoring Reporting

Recommendation: We recommend the University establish and implement a contingency process to ensure enrollment reporting continues during system access disruptions. This process should include monitoring NSC access status and developing alternative procedures to prevent reporting gaps, ensuring that...

Recommendation: We recommend the University establish and implement a contingency process to ensure enrollment reporting continues during system access disruptions. This process should include monitoring NSC access status and developing alternative procedures to prevent reporting gaps, ensuring that all student statuses are submitted accurately and within the required 60-day timeframe. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: National University agrees with the importance of ensuring accurate and timely enrollment reporting to NSLDS. The University has taken significant steps to improve its internal controls and compliance with enrollment reporting requirements. The University has identified a few items that have resulted in challenges to accurate and timely enrollment reporting during the audit year. National Student Clearing House (NSC) reporting: On October 18, 2024, the institution was notified by NSC that its access to process enrollment reporting on behalf of NU was revoked during July 2024, resulting in a reporting gap. The University took immediate action to restore access to NSC. Access issues were fully resolved on October 23, 2024. Additionally, NU revised its policies and implemented an internal control plan that monitors NSC activity allowing for proactive identification of future service interruptions. All 33 enrollment certification errors occurred during the disconnect noted above. The University believes its current enrollment certification processes are timely, accurate, and compliant. Timing of implemented enrollment reporting changes: During the audit period National University implemented several improvements to refine and enhance the timeliness of its enrollment reporting. NU established stronger alignment across both OPEIDs and adjusted its timelines to ensure consistent and timely submissions. As part of this effort, the University restructured its reporting schedule, so that finalized enrollment report is submitted by the 6th of each month, supporting a successful and expedited monthly transfer from NSC to NSLDS. Since implementing these revised timelines and deadlines, the University has observed significant improvements and consistency in its internal QA audit scores during the audit period (since January 2025). Four of the five late reporting instances occurred before the implementation date of the University’s enrollment reporting changes. The University believes its refined and enhanced process changes demonstrate its commitment to timely, accurate, and compliant enrollment certification processes. One of the five late reporting instances occurred after the implementation date, and that was related to the student’s status change from active, to pending graduate, to graduate, and then withdrawn. The University will evaluate its process for reporting student status changes from pending graduate, graduate, and withdrawal to ensure clear definitions and status flows are in place. The University will create and deliver focused training in this area to stress the importance of accurate enrollment reporting. In addition to the above, the University will continue to take the following steps: • Continued monitoring and refining of processes to maintain timely and accurate reporting. Including, but not limited to its monthly testing of enrollment reporting accuracy to NSLDS conducted by the quality assurance team. • Identification and timely delivery of training for areas of opportunity identified in the monthly reviews to the registrar and data operations teams. • Revise the internal changes and documentation processes to ensure clarity of policy and regulatory guidance in areas of identified risk/confusion during enrollment reporting processing. Name(s) of the contact person(s) responsible for corrective action: - Rob Conlon, AVP Financial Aid Compliance - Sarah Massey, AVP of Operations Student Support and Registrar Operations - Gabrielle Witruke, Associate Director Data Analytics Planned completion date for corrective action plan: November 2025

View Audit 389454

Finding 1175613 (2025-005)

Material Weakness 2025

Otero County

NM

Subrecipient Monitoring Reporting § 200.331

Views of Responsible Officials Management concurs with the finding. The Operation Stonegarden grants are managed by Broken Arrow Services, LLC, who is contracted with Otero County for this purpose. Broken Arrow Services, LLC has communicated to all sub-recipients the importance of submitting reports...

Views of Responsible Officials Management concurs with the finding. The Operation Stonegarden grants are managed by Broken Arrow Services, LLC, who is contracted with Otero County for this purpose. Broken Arrow Services, LLC has communicated to all sub-recipients the importance of submitting reports and invoices in a timely manner so that financial and performance reports can be completed and submitted to DHSEM by the required deadlines each quarter. All late submissions by sub-recipients will be tracked and follow-up efforts will be documented. Reimbursement to sub-recipients who are not in compliance will be withheld until all proper documentation and reporting has been submitted and reviewed for accuracy. Finding Resolutions Timeline: June 30, 2026 Designation Of Employee Position Responsible For Meeting This Deadline: Finance Director

View Audit 389450

Finding 1175612 (2025-004)

Material Weakness 2025

Otero County

NM

Reporting Subrecipient Monitoring Cash Management § 200.303

Views of Responsible Officials Management concurs with the finding. The Operation Stonegarden grants are managed by Broken Arrow Services, LLC, who is contracted with Otero County for this purpose. For future audits, management will refer auditors directly to Broken Arrow Services, LLC for all docum...

Views of Responsible Officials Management concurs with the finding. The Operation Stonegarden grants are managed by Broken Arrow Services, LLC, who is contracted with Otero County for this purpose. For future audits, management will refer auditors directly to Broken Arrow Services, LLC for all documentation, (other than the SEFA and general ledger reports), as they maintain the most accurate and up-todate records for all reporting, purchases, and reimbursements. Broken Arrow Services, LLC has communicated to all sub-recipients the importance of submitting reports and invoices in a timely manner so that financial and performance reports can be completed and submitted to DHSEM by the required deadlines each quarter. All late submissions by sub-recipients will be tracked and follow-up efforts will be documented. The SEFA report did not include the expenditures for sub-recipients, and this was an honest oversight that will not be omitted in the future. The Finance Department will continue to prepare the SEFA and provide general ledger reports to the auditors. Finding Resolutions Timeline: Completed. December 18, 2025 Designation Of Employee Position Responsible For Meeting This Deadline: Finance Director

View Audit 389450

Finding 1175611 (2025-002)

Material Weakness 2025

Lehigh University

PA

Special Tests & Provisions Student Financial Aid Subrecipient Monitoring

Finding 2025-002; Lehigh acknowledge that in two instances, Title IV credit balances were not refunded within the required 14-day timeframe. The two exceptions identified were isolated in nature and attributable to unique circumstances rather than systemic process failure. In the first instance, the...

Finding 2025-002; Lehigh acknowledge that in two instances, Title IV credit balances were not refunded within the required 14-day timeframe. The two exceptions identified were isolated in nature and attributable to unique circumstances rather than systemic process failure. In the first instance, the student was enrolled in the summer term and their summer Pell Grant was not processed until October. As a result, the Title IV credit balance was created well after the end of the summer payment period, outside of our typical refund monitoring cycle for that term. In the second instance, the credit balance was identified within the 14-day requirement. However, the student had not enrolled in direct deposit through the eBill system. Lehigh contacted the student to obtain payment instructions. When no banking information was provided to Lehigh, a paper check had to be issued, which extended the disbursement timeline beyond the 14-day period. While these situations were atypical, we recognize the importance of ensuring timely disbursement regardless of individual circumstances. To strengthen controls, we continue to prioritize Title IV credit balance refunds over refunds resulting from institutional aid or other funding sources to ensure compliance with federal timelines. Although we continue our institutional practice of holding refunds until after the 10th day of class to account for schedule adjustments and enrollment changes, we will begin generating and reviewing credit balance reports earlier in the cycle to allow sufficient processing time. We will implement automated reporting to identify credit balances that occur after the end of an academic period. These reports will be sent to a shared bursar office email account rather than an individual staff member. This will ensure visibility and actionability even during staff absences, turnover, or non-workdays. Responsibility for monitoring and processing Title IV credit balances will be formally documented. Multiple staff members will be trained in the procedures to ensure appropriate backup coverage during employee absences, leave, or staffing transitions. Management will periodically review refund timelines to confirm adherence to procedures and verify that credit balances are disbursed within regulatory timeframes. We believe these corrective actions address the audit recommendation and will ensure timely and consistent processing of Title IV credit balance disbursements regardless of staffing availability.Name of contact person: Jennifer Mertz is the Assistant Vice Provost of Financial Services and Director of Financial Aid. Completion date: All of the control strengthening mechanisms and documentation will be complete by June 30, 2026.

View Audit 389449

Finding 1175593 (2025-001)

Material Weakness 2025

Milwaukee Area Technical College

WI

Subrecipient Monitoring § 200.332

Finding 2025-001 Condition The auditors reviewed MATC’s subaward agreement with Literacy Services of Wisconsin, noting that some of the required information under 2 CFR 200.332 Section (b) was not included in the contract. Additionally, the auditor noted that MATC did not document the required risk ...

Finding 2025-001 Condition The auditors reviewed MATC’s subaward agreement with Literacy Services of Wisconsin, noting that some of the required information under 2 CFR 200.332 Section (b) was not included in the contract. Additionally, the auditor noted that MATC did not document the required risk assessment process for subrecipients for the year ended June 30, 2025. Corrective Action Plan Corrective Action Planned: MATC has taken immediate steps to address the subaward agreement deficiencies identified under 2 CFR 200.332(b) and to strengthen oversight and monitoring of federal subrecipients. The Dean of Community Education and her team have reviewed and updated the required information that must be included in all federally funded subgrant agreements, including the missing 2 CFR 200.332(a) requirements such as the UEI number, Federal Award Identification Number (FAIN), award dates, and applicable indirect cost rates. MATC’s Office of General Counsel has reviewed and approved an updated subaward agreement template to ensure compliance with the Uniform Administrative Requirements. Process improvements include adoption of a universal subgrant template, clarification of staff responsibilities by shifting the responsibilities to the Grants and Finance Department as related to monitoring subawards, and formal documentation of MATC’s subrecipient risk assessment and monitoring processes. Name(s) of Contact Person(s) Responsible for Corrective Action: ● Dr. Josephine Gomez Dean, Community Education & Strategic Engagement (414) 297-6068 gomezj76@matc.edu ● Stephanie Townsend Manager, Sponsored Project (414) 297-6333 townsens@matc.edu ● Sharon Oleinik (414) 297-7815, Sr. Financial Grants Administrator oleinis1@matc.edu Anticipated Completion Date: Corrective Actions have been completed at the time of this document completion.

View Audit 389422

Finding 1175584 (2025-001)

Material Weakness 2025

McDaniel College and Subsidiary

MD

Subrecipient Monitoring Cash Management Reporting

Finding 2025-001 Condition Significant Deficiency – Disbursement/Refund of Credit Balances - Title IV regulations (34 CFR 668.164(h)(1) require that Title IV credit balances on student accounts be paid directly to the student as soon as possible but no later than 14 days after the credit balance occ...

Finding 2025-001 Condition Significant Deficiency – Disbursement/Refund of Credit Balances - Title IV regulations (34 CFR 668.164(h)(1) require that Title IV credit balances on student accounts be paid directly to the student as soon as possible but no later than 14 days after the credit balance occurred. A student or parent may authorize the Institution to hold the credit balance to be applied to specified other nontuition fees, room and board charges as noted in the regulations at (34 CFR 668.165(b)). The credit balance generated in the accounts of 2 out of 25 students tested was not timely refunded to them based on the outlined criteria, leading to late refunds to those students (neither of which completed a voluntary hold authorization). The sample was not a statistically valid sample. The College's payment process cycle is not set up to process refunds as soon as possible, which caused delays in refunds being made to students, resulting in a violation of the 14-day maximum policy. Corrective Action Plan Corrective Action Planned: The College acknowledges the untimely disbursement of Title IV credit balance refunds. We concur that, for 2 of the 25 student accounts reviewed, Title IV credit balances were not refunded within the 14-day period required under 34 CFR 668.164(h)(1). We further acknowledge that no valid student or parent authorization to hold these credit balances was on file, and therefore the refunds should have been issued promptly. The College completed an internal review and determined that the delays resulted from the structure of the existing payment processing cycle. Although the College’s processes emphasize careful reconciliation and verification of student account activity, the timing of our refund cycle was not aligned with the regulatory requirement. To remediate this deficiency and ensure full compliance going forward, the College is implementing the following corrective action: Revision of Federal Funds Disbursement Policies: The College is revising its policy governing the drawdown and disbursement of federal funds to align the timing of Title IV activity with the academic add/drop period. This change will ensure greater predictability of credit balance creation and enhance monitoring capabilities. The College is committed to strengthening its internal controls to ensure sustained compliance with all Title IV cash management regulations. Name(s) of Contact Person(s) Responsible for Corrective Action: Pat Tyler, Bursar and Destiny Guerrero, Director of Financial Aid. Anticipated Completion Date: May 2026 – next semester starting date

View Audit 389412

Finding 1175529 (2025-005)

Material Weakness 2025

Bay City Independent School District

TX

Subrecipient Monitoring Allowable Costs / Cost Principles Material Weakness § 200.403

Material weakness in internal control over compliance - Lack of control over monitoring of excess costs Planned Corrective Action: The District is developing procedures to adequately monitor the calculation of excess costs during the year. Program staff and business office personnel will meet regula...

Material weakness in internal control over compliance - Lack of control over monitoring of excess costs Planned Corrective Action: The District is developing procedures to adequately monitor the calculation of excess costs during the year. Program staff and business office personnel will meet regularly to identify any potential issues for noncompliance with excess costs and develop a plan accordingly to ensure compliance is met. Staff training and utilization of the calculation tools provided by TEA will be provided to ensure all involved gain the necessary understanding. Responsible Contact Person: Farrah Jernigan, Chief Financial Officer Anticipated Completion Date: June 30, 2026

View Audit 389296

Finding 1175528 (2025-004)

Material Weakness 2025

Bay City Independent School District

TX

Matching / Level of Effort / Earmarking Subrecipient Monitoring § 200.303

Material weakness in internal control over compliance - Lack of control over monitoring of maintenance of effort Planned Corrective Action: The District is developing procedures to adequately monitor the calculation of maintenance of effort during the year. Program staff and business office personne...

Material weakness in internal control over compliance - Lack of control over monitoring of maintenance of effort Planned Corrective Action: The District is developing procedures to adequately monitor the calculation of maintenance of effort during the year. Program staff and business office personnel will meet regularly to identify any potential issues for noncompliance with maintenance of effort and develop a plan accordingly to ensure compliance is met. Staff training and utilization of the calculation tools provided by TEA will be provided to ensure all involved gain the necessary understanding. Responsible Contact Person: Farrah Jernigan, Chief Financial Officer Anticipated Completion Date: June 30, 2026

View Audit 389296

Finding 1175527 (2025-003)

Material Weakness 2025

Bay City Independent School District

TX

Matching / Level of Effort / Earmarking Subrecipient Monitoring § 200.303

Material weakness in internal control over compliance - Lack of control over monitoring of maintenance of effort Planned Corrective Action: The District is developing procedures to adequately monitor the calculation of maintenance of effort during the year. Program staff and business office personne...

Material weakness in internal control over compliance - Lack of control over monitoring of maintenance of effort Planned Corrective Action: The District is developing procedures to adequately monitor the calculation of maintenance of effort during the year. Program staff and business office personnel will meet regularly to identify any potential issues for noncompliance with maintenance of effort and develop a plan accordingly to ensure compliance is met. Staff training and utilization of the calculation tools provided by TEA will be provided to ensure all involved gain the necessary understanding. Responsible Contact Person: Farrah Jernigan, Chief Financial Officer Anticipated Completion Date: June 30, 2026

View Audit 389296

Finding 1175444 (2025-001)

Material Weakness 2025

Round Rock Housing Authority

TX

HUD Housing Programs Internal Control / Segregation of Duties Subrecipient Monitoring

At the time of the most recent independent audit by Smith Marion conducted in December 2025, it was found that RRHA was not completing voucher re-inspections within the required timeframe when an inspection failed. Health and safety inspections are required to be reinspected within 48 hours, and oth...

At the time of the most recent independent audit by Smith Marion conducted in December 2025, it was found that RRHA was not completing voucher re-inspections within the required timeframe when an inspection failed. Health and safety inspections are required to be reinspected within 48 hours, and other inspections must be completed within 30 days. In the past RRHA only had one inspector on staff who tracked all inspections. Due to an increase in portability vouchers a second caseworker was hired in 2025. However, a new system was not created to track both caseworker’s inspections. This resulted in RRHA overlooking timelines and not completing inspections in a timely manner as required. Part of this was also related to miscommunication between the two case workers. To ensure inspections are completed as required by HUD regulation, in the future, each caseworker/inspector is now required to schedule a follow-up inspection appointment at the same time as the failed inspection report is created. Additionally, a separate shared spreadsheet has been created to track failed inspection and verify that each one is being completed within the required time. With these new steps in place we can indicate if a failed inspection needs a 24-hour and/or a 30- day re-inspection and if a follow-up inspection has been already scheduled. RRHA also increased the scheduled time/ days from once a week to two days a week for inspection since we now have two HCV employees/ inspectors available. Effective immediately the process for inspection has been updated and both HCV employees are completing inspections.

View Audit 389242

Finding 1175443 (2025-003)

Material Weakness 2025

City of Sand Springs

OK

Reporting Subrecipient Monitoring § 200.331 § 200.510

RE: Finding 2025-003 Misreporting of Pass-Through Grant Expenditures in Compliance Report In conjunction with our FY25 annual audit, please see the City's corrective action plan below: The City of Sand Springs will strengthen internal controls over federal grant reporting to ensure proper distinctio...

RE: Finding 2025-003 Misreporting of Pass-Through Grant Expenditures in Compliance Report In conjunction with our FY25 annual audit, please see the City's corrective action plan below: The City of Sand Springs will strengthen internal controls over federal grant reporting to ensure proper distinction between direct federal awards and federal pass-through grants, in accordance with Uniform Guidance and SLFRF requirements. Specifically, the City will implement the following corrective actions: Separate Tracking of Direct vs. Pass-Through Funds o The Finance Department will revise grant accounting procedures to clearly segregate expenditures related to: Direct SLFRF (ARPA) awards administered by the City, and Federal pass-through grants administered by external entities, including OWRB. o Separate project codes and/or accounting identifiers will be maintained to prevent commingling of expenditures. Revision of SLFRF Reporting Procedures o Written procedures for preparation and review of the SLFRF Compliance Report will be updated to explicitly state that: Only expenditures related to direct federal awards are to be reported by the City, and Expenditures related to pass-through grants are excluded and reported by the pass-through entity. o A documented review step will be added to verify that reported expenditures align with the funding source prior to submission. Staff Training and Awareness o Finance staff involved in grant accounting and reporting will receive targeted training on: Uniform Guidance requirements (2 CFR 200), The distinction between direct federal awards and pass-through grants, and Proper SEFA and SLFRF reporting responsibilities. o Training will be documented and incorporated into onboarding materials for future staff. Coordination with Pass-Through Entity (OWRB) o The City will coordinate with OWRB to confirm: The sequence of fund utilization (pass-through vs. direct ARPA funds), and Roles and responsibilities for federal expenditure reporting. Expected completion date: Procedures will be implemented for the fiscal year ending June 30, 2026, and applied during interim processing and year-end close. Party Responsible: Finance Director and Finance Staff, in coordination with applicable Department Heads and Project Managers. Contact Information: Arlena Barnes 918-246-2646 arlena.barnes@sandspringsok.gov

View Audit 389227

Finding 1175419 (2025-001)

Material Weakness 2025

City of Reno

NV

Subrecipient Monitoring Reporting Significant Deficiency

Federal program: Community Development Block Grants/Entitlement Special Purpose Grants Cluster (CFDA #14.218). Condition/context: During testing, auditors were provided with documentation that indicated the City did not file a PR29-CDBG Cash on Hand Quarterly report by the specified due date. Of the...

Federal program: Community Development Block Grants/Entitlement Special Purpose Grants Cluster (CFDA #14.218). Condition/context: During testing, auditors were provided with documentation that indicated the City did not file a PR29-CDBG Cash on Hand Quarterly report by the specified due date. Of the four (4) reports available for testing, two (2) were randomly selected and it was noted that one (1) was not filed by the due date. Corrective action: The City will establish and maintain deadlines and monitor the timely submission of all required reports under the CDBG program, including the PR29 quarterly report. The tracking system will include key due dates, responsible staff and confirmation of submission to ensure accountability and consistency. Procedures will also be established and implemented to ensure continuity of reporting in the event of staff turnover. Implementation date: Implemented and in effect immediately. Contact person: Elaine Wiseman, (775)334-2578, wisemane@reno.gov

View Audit 389174

Finding 1175414 (2025-001)

Material Weakness 2025

Chestnut Health Systems, INC

IL

Procurement, Suspension & Debarment Subrecipient Monitoring § 200.320

United States Department of Health and Human Services 2025-001 Procurement – Assistance Listing No. 93.279 Condition: The Organization did not maintain sufficient documentation to support the procurement method utilized prior to engaging a contracted service provider. Recommendation: We recommend th...

United States Department of Health and Human Services 2025-001 Procurement – Assistance Listing No. 93.279 Condition: The Organization did not maintain sufficient documentation to support the procurement method utilized prior to engaging a contracted service provider. Recommendation: We recommend the Organization consistently follow its established policies and procedures related to the maintaining of necessary documentation to support the method of procurement utilized. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Given the infrequency of spend in excess of the Simplified Acquisition Threshold, Chestnut will take a targeted approach in the corrective action. An initial first step in correction action has been taken and completed 2/18 including educating and informing Chestnut Health Systems Audit Committee and Chestnut Executive Leadership of lack of documentation supporting the procurement process. The Executive Leadership team and assigned grant leadership will be provided with the current Chestnut Procurement policy, reinforcing the requirements at each respective level of spend. For those programs with anticipated vendor spend in excess of the Simplified Acquisition Threshold, targeted working sessions will occur with respective program leadership and the Executive Leadership team to reinforce expectations, review template tools that can be leveraged during the process, and to remedy any gaps in understanding the policy and execution of the policy. Name(s) of the contact person(s) responsible for corrective action: Melissa Woodbury, CFO. Planned completion date for corrective action plan: By June 1, 2026 If there are any questions regarding this plan, please call Melissa Woodbury, CFO, at 309-820-3572.

View Audit 389155

Finding 1175413 (2025-001)

Material Weakness 2025

The Peregrine Fund, Inc.

ID

Subrecipient Monitoring § 200.332

Views of Responsible Officials: The Organization's procedure manual will be updated to include procedures that align with 2 CFR 200.332. These procedures will include the documentation of risk assessment for each subrecipient, and establish monitoring activities that are responsive to the level of r...

Views of Responsible Officials: The Organization's procedure manual will be updated to include procedures that align with 2 CFR 200.332. These procedures will include the documentation of risk assessment for each subrecipient, and establish monitoring activities that are responsive to the level of risk.

View Audit 389127

Finding 1175409 (2025-001)

Material Weakness 2025

Pasadena Area Community College District

CA

Student Financial Aid Subrecipient Monitoring Significant Deficiency

The Office of Financial Aid is currently strengthening the Return to Title IV (R2T4) process by formalizing written procedures and integrating industry best practices. As part of this effort, we are implementing a quality control system whereby a second team member reviews each file to ensure the ac...

The Office of Financial Aid is currently strengthening the Return to Title IV (R2T4) process by formalizing written procedures and integrating industry best practices. As part of this effort, we are implementing a quality control system whereby a second team member reviews each file to ensure the accuracy of calculations, the completion of necessary pullbacks or billings, and timely communication with students. Additionally, we are enhancing our Title IV reconciliation process to serve as an added layer of oversight, verifying that award data in our student information system (Banner) aligns with records in the Common Origination and Disbursement (COD) system.

View Audit 389117

Finding 1175386 (2025-001)

Material Weakness 2025

Portales Municipal School District

NM

Subrecipient Monitoring Reporting § 200.512

To ensure future compliance with Federal Audit Clearinghouse (FAC) deadlines, the Portales Municipal School District will implement the following milestones: • Milestone 1: Establish an internal compliance calendar that triggers a primary alert 30 days prior to the federal deadline (March 31) and a ...

To ensure future compliance with Federal Audit Clearinghouse (FAC) deadlines, the Portales Municipal School District will implement the following milestones: • Milestone 1: Establish an internal compliance calendar that triggers a primary alert 30 days prior to the federal deadline (March 31) and a secondary alert immediately upon the release of the audit report by the New Mexico State Auditor. • Milestone 2: Formalize a coordination protocol between the Finance Department and the external audit firm to ensure the Data Collection Form (DCF) is drafted and ready for certification within 15 days of the state report release. • Milestone 3: Conduct a final review and electronic submission of the report and DCF to the FAC no later than 30 days post-release, ensuring all filings are finalized well before the absolute nine-month deadline. Responsible party(ies) for corrective action(s): Director of Finance Corrective action(s) timeline: January 31, 2026

View Audit 389100

Finding 1175379 (2025-002)

Material Weakness 2025

University of Mobile, Inc.

AL

Student Financial Aid Subrecipient Monitoring Eligibility

Condition: A student added an additional course after the summer term census date, however, the Financial Aid Office did not adjust the student’s corresponding Pell Grant eligibility. As a result, the Pell Grant award was not recalculated to include the additional course. Criteria: The University’s ...

Condition: A student added an additional course after the summer term census date, however, the Financial Aid Office did not adjust the student’s corresponding Pell Grant eligibility. As a result, the Pell Grant award was not recalculated to include the additional course. Criteria: The University’s monitoring controls for post-census date enrollment changes were not consistently applied. Although the University’s normal process includes reviewing and adjusting aid when students add/drop classes after the census date, this case was not identified due to human oversight for post-census date schedule changes. Cause: Per 34 CFR 690.80(b)(2)(ii), the University must adjust Federal Pell Grant awards if a student’s enrollment status changes and the change occurs within the University’s established recalculation (census) policies. Additionally, internal University policy states that Pell Grant awards will be adjusted when students add/drop courses after the census date if those courses are applicable toward the student’s degree or certificate requirements and occur within the eligible recalculation period. Effect: Because the student’s enrollment increase was not identified and processed, the student did not receive the full amount of Pell Grant awards they were entitled to. This resulted in a $924 underpayment to the student. Context: This issue was identified during audit testing of Pell Grant awards for the 2024–2025 year. The University reviewed the case and agreed that the student should have received an additional $924. The University believes the error to be an isolated incident rather than a systemic process failure; however, it indicates that post-census monitoring controls may not be fully effective in all cases. Recommendation: The University should establish a formal process to monitor when students add/drop courses after the term census date to ensure financial aid is accurately adjusted and reflected in a timely manner. This process should include periodic reviews or automated reports that identify enrollment changes impacting grant eligibility and additional procedures to verify that corresponding adjustments are made to student accounts. Strengthening this process will help ensure compliance with federal regulations and prevent underpayments or overpayments of student aid. View of Responsible Officials and Planned Corrective Action: The University has recognized the failure to adjust the student's enrollment status and recalculate the Pell Grant award in a timely manner that resulted in an underpayment of $924. To prevent similar issues in the future, the Financial Aid Office will implement a formal process to monitor students who add/drop courses after the census date, including generating reports to flag enrollment changes that impact Pell Grant eligibility and reviewing these cases to ensure adjustments are made promptly.

View Audit 389096

Finding 1175365 (2025-006)

Material Weakness 2025

University of New Mexico

NM

Allowable Costs / Cost Principles Matching / Level of Effort / Earmarking Subrecipient Monitoring § 200.303 § 200.430

Management Response: The University agrees with this recommendation and will modify the procedures associated with the review of subsequent payroll and fringe adjustments to ensure that in addition to reversing in total that the adjustments also reverse at the index-account level. These new procedur...

Management Response: The University agrees with this recommendation and will modify the procedures associated with the review of subsequent payroll and fringe adjustments to ensure that in addition to reversing in total that the adjustments also reverse at the index-account level. These new procedures will be implemented by February 27, 2026, and will be overseen by the Deputy Controller.

View Audit 389089

Finding 1175362 (2025-001)

Material Weakness 2025

Berklee College of Music, Inc.

MA

Student Financial Aid Matching / Level of Effort / Earmarking Subrecipient Monitoring

Criteria Institutions submit Direct Loan, Pell Grant, TEACH Grant, and IASG origination records and disbursement records to the Common Origination and Disbursement (COD) system. Origination records can be sent well in advance of any disbursements, as early as the institution chooses to submit them f...

Criteria Institutions submit Direct Loan, Pell Grant, TEACH Grant, and IASG origination records and disbursement records to the Common Origination and Disbursement (COD) system. Origination records can be sent well in advance of any disbursements, as early as the institution chooses to submit them for any student the institution reasonably believes will be eligible for a payment. The disbursement record reports the actual disbursement date and the amount of the disbursement. ED processes origination and/or disbursement records and returns acknowledgments to the institution. The acknowledgments identify the processing status of each record: Rejected, Accepted with Corrections, or Accepted. Title 2 U.S. Code of Federal Regulations Part 200 (2CFR 200) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, section 303(a) states, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statues, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition In testing the origination and disbursement data, key items to test on origination records, if applicable, are: Social Security number, award amount, enrollment date, verification status code, transaction number, cost of attendance, and academic calendar. During our test work over the key items on origination records as reported on COD, KPMG identified the following: • 6 of the 40 students selected for test work had incorrect academic start or end dates that did not agree to the College’s records. None of the items that were exceptions described above resulted in the College over awarding students for the current fiscal year. Cause The condition resulted from the College Student Financial Aid Operations Department not reporting updated information to the COD System when changes were made to enrollment dates of the students identified due to the College not having an adequate internal control process. Questioned Costs None. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Identification of Whether the Audit Finding was a Repeat Finding This is not a repeat finding. Recommendation We recommend the College review and enhance its process related to reporting key items to the COD System and update key fields as information may change during the awarding process to ensure that they agree to the College’s records. Views of Responsible Officials Responsible Individual: Russell Romandini, Director of Student Financial Aid Services, Student Financial Services Contact Information: rromandini@berklee.edu , 617-747-2505 Management concurs with the recommendation. Berklee will enhance internal controls over the reporting of key data to the COD system. Designated staff in the Student Financial Aid Operations Department and Office of the Registrar has developed reports and implemented a recurring review process comparing enrollment and academic year dates in PowerFAIDS to Berklee’s registration records. This review will be performed at relevant intervals to be sure data mismatches are resolved by the end of the academic year processing cycle. These intervals occur towards the end of academic year processing (summer semester for campus; spring and summer terms for the online program) as these are the academic periods that generate the most enrollment changes, and with it, academic year date fluctuations. Any differences identified will be updated in PowerFAIDS and COD as necessary and in a timely manner to ensure ongoing data alignment and accuracy between the COD system and institutional records. Supervisory oversight by the Director of Student Aid Operations will include review and sign off to ensure the enhanced procedures are consistently followed by the Operations team to remediate the risk of any future findings. Expected Implementation Completed: May 31, 2026 Status of Completion: In Process

View Audit 389075

Finding 1175351 (2025-001)

Material Weakness 2025

Union of Pan Asian Communities

CA

Reporting Subrecipient Monitoring Matching / Level of Effort / Earmarking § 200.329

January 27, 2026 Aldrich CPAs + Advisors LLP 7676 Hazard Center Drive, Suite 550 San Diego, CA 92108 RE: Corrective Action Plan Dear Aldrich, The following are responses to the finding identified in Union of Pan Asian Communities (UPAC) audit for the year ended June 30, 2025: 1) Finding 2025-001 a. ...

January 27, 2026 Aldrich CPAs + Advisors LLP 7676 Hazard Center Drive, Suite 550 San Diego, CA 92108 RE: Corrective Action Plan Dear Aldrich, The following are responses to the finding identified in Union of Pan Asian Communities (UPAC) audit for the year ended June 30, 2025: 1) Finding 2025-001 a. Program Information: 93.778 Medicaid Cluster – Medical Assistance Program, Pass-Through Award #567787 b. Criteria: In accordance with 2 CFR 200.329, non-Federal entities must submit performance reports at the interval required by the Federal awarding agency or pass-through entity no later than the specified due date. If a justified request is submitted by a non-Federal entity, the Federal agency may extend the due date for any performance report. c. Condition: During our audit, we identified one quarterly status report that was submitted to the Contracting Officer’s Representative (COR) after the stated due date. Response: UPAC has put in place a system of reminders and deadline review with program managers and administrative staff to ensure deadlines for contract reporting due dates are calendared and scheduled in advance. Contact persons responsible for corrective action: 1) Sarah Ferry, Chief Financial Officer 2) Courtney Boatman, Vice President of Addiction Treatment and Recovery Services Completion date: Additional internal control procedure noted above will be effective immediately. Sincerely, Wendy Urushima-Conn Chief Executive Officer Union of Pan Asian Communities

View Audit 389054

Finding 1175318 (2025-003)

Material Weakness 2025

Second Harvest Northern Lakes Food Bank

MN

Subrecipient Monitoring § 200.332

Corrective Action: Beginning in FY 2026, the Partnerships and Programs Department will formalize and implement procedures within its subrecipient monitoring processes to ensure that all subrecipients subject to the Single Audit requirement are identified and verified as compliant. These procedures w...

Corrective Action: Beginning in FY 2026, the Partnerships and Programs Department will formalize and implement procedures within its subrecipient monitoring processes to ensure that all subrecipients subject to the Single Audit requirement are identified and verified as compliant. These procedures will include annual review of subrecipient expenditures, confirmation of audit submissions when applicable, and documentation of all monitoring activities to ensure ongoing adherence to Uniform Guidance requirements. Proposed completion date: Management will implement the above procedures immediately.

View Audit 389029

Finding 1175247 (2025-004)

Material Weakness 2025

Bay Cove Human Services, Inc. & Affiliate

MA

Internal Control / Segregation of Duties Special Tests & Provisions Subrecipient Monitoring

Management acknowledges that certain internal controls did not operate effectively during the year ended June 30, 2025. Management is in the process of implementing additional controls to ensure a stable control environment that supports compliance with cash management and special tests and provisio...

Management acknowledges that certain internal controls did not operate effectively during the year ended June 30, 2025. Management is in the process of implementing additional controls to ensure a stable control environment that supports compliance with cash management and special tests and provisions requirements.

View Audit 388951

Finding 1175246 (2025-003)

Material Weakness 2025

Bay Cove Human Services, Inc. & Affiliate

MA

Internal Control / Segregation of Duties Procurement, Suspension & Debarment Subrecipient Monitoring

Management acknowledges that certain internal controls did not operate effectively during the year ended June 30, 2025. Management is in the process of implementing additional controls to ensure a stable control environment that complies with procurement requirements.

View Audit 388951

Finding 1175245 (2025-002)

Material Weakness 2025

Bay Cove Human Services, Inc. & Affiliate

MA

Subrecipient Monitoring Internal Control / Segregation of Duties

Management acknowledges that certain internal controls did not operate effectively during the year ended June 30, 2025. Management is in the process of implementing additional controls to ensure a stable control environment that supports accurate and timely financial reporting in future periods.

View Audit 388951

Corrective Action Plans

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